Wednesday, 7 July 2010

Why stay invested during market declines




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Stay Invested
For long-term investors, staying invested makes more sense than moving in and out of the market at the first sign of bad news.

Over the past 60 years, bull markets have lasted longer (42 months on average) than bear markets (14 months on average) and have more than made up for the periodic market declines.
Bull markets have begun during economic recessions and expansions and at all level of rates.  And while it is impossible to predict when a bull market will begin, it is possible to miss one by waiting on the sidelines.

Federal fund rates
The interest rate at which private banks lend money for overnight loans.  The Fed generally raises the target federal funds rate to slow economic growth and lowers the rate to facilitate growth.

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