Investors who stuck with equity investments (S&P 500 Index) in October 2008 and through the March 2009 sell off would now be up 9% from October 2008 through August 2009. Many investors liquidated equity investments in October and again in March.
- Investors withdrew $70 billion from the stock market in October 2008 and another $50 billion in the February/March 2009 period.
- As of October 16, 2009, one year after the peak in liquidations, investors who remained in the stock market had fared better than those who exited at the peak of the crisis and stayed on the sidelines.
One implication for investors as it relates to this data is the difficulty in trying to time the market. For investors, focusing on high quality dividend growth stocks provides the potential to minimize the downside volatility in the equity portion of ones portfolio.
Stay-the-Course Ahead of Panic Sellers
By: Fidelity's Market Analysis, Research, & Education Group
October 23, 2009