Dear Reader,
There's no doubt about it; the stock market has hit a rough patch.
You might be feeling like that seems like an understatement.
But believe it or not, the 15.7% drawdown the S&P 500 has experienced from its January all-time high is not far from the average move in an average year.
Indeed, encountering short-term volatility on the path to long-term gains is what investing in the stock market is all about.
The good news in the current economic environment is that earnings are holding up.
The bad news is there are lots of factors to be worried about, including rising interest rates.
The ugly truth is that volatility is always a thing when you're invested in the stock market, and this year's moves are nothing out of the ordinary.
The bottom line is that resilient earnings are at odds with worries about the future. Unfortunately, we'll only know how bad things will get in hindsight.In the meantime, stocks are down, and there's nothing pleasant about that. But as we've discussed before, investing can sometimes be unpleasant.
It's the risk that makes for higher returns.
Exiting out of the market now risks missing a relief rally. Sticking around means hoping for the best. It might be a little painful now, but we are in it for the long haul.
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