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When stock prices begin falling dramatically, it can appear that your only option is to sell to limit losses. But we disagree – if you are a long-term investor, the difference between success and failure may be determined by your actions during a stock market decline.
In fact, long-term investors will likely experience numerous market declines through the years. Consider the following table:
|Dip 5% or more
||Correction 10% or more
||Bear 20% or more
|Number of declines
||3.4 per year
||About 1 every year
||About 1 every 3.5 years|
Source: Ned Davis Research, 1/2/1900-12/31/2017. Past performance is not a guarantee of future results. The Dow Jones industrial Average is unmanaged and is not meant to depict an actual investment. Copyright © 2017 Ned Davis Research, Inc. All rights reserved. Further distribution prohibited without prior permission.
*Investing in stocks involves risk. You may receive more or less than your original investment when you sell your shares.
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