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Chief Investment Strategist Corner (October 8, 2008)
James Swanson, CFA
1. In January of 1970, a bear market started that lasted until May of that year. The market during that time fell 35.4%. In May, a bull market began that lasted until January 1973 and brought a 124% gain in stock values.
1. Panics are based on emotion, and emotions can take on a life of their own. A herd-like mentality develops, and words that start to be used repetitively — such as “collapse,” “endless,” and “plunge” — only feed the frenzy. But it is important to remember that emotions are not your friend when it comes to making big decisions about your savings, retirement, or college money.