Edward Jones Financial Advisor, Mike Kessel, tells us how to stay calm.
Kessel says that even though investors think some of these events are eerily similar to some of the market stumbles in the past 2 years, he doesn't think this volatility will be as severe.
Declines in the US Stock Market since 1900
1/2/1900 - 12/31/2011 Dip (5% or more) Correction (10% or more) Bear (20% or more)
Number 384 123 32
Occurences 3.4 per year About 1 per year About 1 every 3.5 years
Points (Dow above 13,000) 650 1,300 2,600
Kessel warns us to remember that market volality is normal. That means we should expect stocks to drop by 10% or more at least once during the remainder of the year. Pullbacks in the market - when stocks drop by 5% or more - occur about three times a year.
Kessel says there is improvement over last year.
He points to the following as examples.
. Some progress in Europe
. A stronger US economy
. Inflation relief
. Improving global growth