Quotables from an article by Larry Swedroe:
There’s one other critical point we need to cover regarding stage-one thinking. Those who decide to sell until the “green light” comes back on, indicating that it’s once again safe to invest in stocks, don’t understand that there’s never a green light when it comes to equity investing. It’s never safe to invest. There’s always a high degree of risk. For example, if you had sold in March of 2009, when would have it been safe to again invest in stocks?
There never was a green light, which was why most investors missed the rally. And there never is a green light. So if you decide to sell, you must have a plan to get back in. But there’s really no effective way to design such a plan, because history is likely to repeat itself, and you’ll be trapped in a vicious circle of buying high and selling low.
The last thing investors should do in response to a crisis, or any period of volatility and uncertainty is to let their stomachs take over.