Markets go down, the news is discouraging, and the temptation to sell everything to “cut your losses” is strong. But it’s precisely in these moments that it’s essential to pause, breathe… and think.
Those who hold on to their investments today – whether stocks, funds, or life insurance policies – haven’t lost anything. They still own exactly the same amount of shares and bonds.
It’s true: the value has gone down, but as long as you don’t sell, you haven’t actually incurred any loss.
Market history shows this clearly: after every major crisis, markets have always recovered within a year.
The real risk, in fact, is exiting at the wrong time, because selling means locking in a loss that, had we held onto the investment, would have only been temporary.
And getting back in after selling is even harder: markets tend to rebound when we least expect it, and those who stay out often end up returning at higher prices.
In short, it’s essential not to be driven by fear or emotions, and to maintain a long-term perspective.