Mark, the markets have been going up for quite a while now, isn’t it about time for a significant correction or even a crash? What should I do”?
I have been hearing these type of questions ,from clients & contacts with greater regularity as of late.
The truth is no one knows when a correction or even a crash will occur, not even the legendary investor Warren Buffett can predict or time the markets. I know that I certainly don’t possess any magical powers in this regard.
However, it is true that in general the markets have been going up for an extended period of time.
History tells us that market corrections of 10% or more occur on average about once every year or two, and significant declines of 20% or more occur about every 5 or 6 years.
Does this mean that some headwinds are coming on the horizon? Inevitably yes, we just don’t know when.
However, I have found that having serious conversations about how we would, or might react when the markets do experience a temporary decline is a very valuable & practical exercise.
I have long referred to these discussions as “lifeboat drills”.
Here is an excellent article on how to take your own investment lifeboat drill, and how it can help you weather future disaster.
I encourage you to take the exercise, and contact me directly if you have any questions or concerns.