Good morning, good afternoon, good evening. Depending on the part of the world you’re in. This is Jonathan Satovsky of Satovsky Asset Management and on today’s episode of “Seeking Wisdom, Wealth, and Wellness,” I want to talk about the frequency of declines.
The markets are going through a 10%, what they consider, a correction. And those corrections have happened 63% of the time since 1928. 63% of the year, since 1928, we’ve had 10% declines. So quite frequently.
We’ve had 15% declines 40% of the time and 20% declines 20- over 25% of the time [more like] 26% of the time. That means one out of four years you have a 20% decline. So it’s par for the course.
However, when you’re living through it, the amount of tumult, pain, anxiety, stress, worry, recency bias, path dependency about people’s confidence about the future gets challenged quite a bit. People stop saving. People start making some behavioral mistakes. They change their path. They start thinking, “You know what? Stocks aren’t for me. It’s not a good thing to invest for the future. It’s too speculative. I can’t handle it.”
They don’t realize that you’re buying a share in a business, in a profitable business, and you’re a shareholder in the future profits and dividends that can give you and your family, and future generations, financial freedom. So, just think about it as catching the flu once in a while. Sometimes you get sick, you need to get a little extra rest, a little soup, you get a little recovery and you’re back in business.
So get some perspective so you can stay in the game on your path to Wisdom, Wealth, and Wellness.
Have a great day.
