After months of volatile trading, the Dow reached positive territory for the year at the close on Friday. It may seem remarkable that with all of the bad news about the situation in Europe and the economic situation here in the United States that the markets have pushed higher despite turmoil in the stock market since early August. The resilience of the market lends credibility to the idea of not giving up on your overall investment plan in times of volatility. If you have a long-term plan, it is important to stay the course despite short-term market declines rather than making reactionary decisions. Continuing to invest when the market declines may be difficult to stomach at times, but those that purchase additional shares at lower values will benefit greatly if the market goes back up.
We are obviously not clear of the turmoil as of yet, however. After reaching positive territory on Friday, the market declined over two hundred points yesterday before rebounding significantly today. The concerns that have riled investors since August are still lurking out there and will probably cause further ups and downs going forward. As we have discussed here previously, you should be comfortable enough with your investments so that you are not losing sleep at night over the markets, and reviewing and tweaking your financial plan regularly is always a good idea. The latest evidence of resilience in the markets, however, certainly suggests that there is still a light at the end of the tunnel for long-term investors.