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The Dow at 20,000 and What That Means for You

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Just a few weeks ago, people were feeling nervous about how the election would cause the market to dip. All of those election jitters are now firmly in the rearview mirror.

With the Dow set to hit 20,000, a lot of people are paying attention to what all time highs mean. Reaching all-time highs isn’t a rare occurrence, but it is the kind of moment when lots of investors start getting nervous. The desire to sell and ‘win’ gets even stronger when the market looks like it’s bound to correct at any moment.

Here’s a little bit of data that you might want to consider.

Since 1950 the market has been at an all time high for 7% of all days. When you think of that in reverse, it puts everything into perspective. 93% of the time, the market is in a drawdown state from one of those 7% days.

Atlas Wealth Advisors All Time Highs Dallas Atlas Wealth Advisors

Source: A Wealth of Common Sense

It’s normal to feel a bit of fear about losing gains that you achieved during those rises, but no one knows if this particular all-time high is guaranteed to stay a record for very long.

The market is going to correct. Figuring out when the correction will occur and timing your behavior around it, isn’t likely. After all, this isn’t a game you’re playing. It’s a long-term, long-haul plan.

Take a look at this chart of the S&P500 stock market index for the last 100 years. As long term investors, we have history on our side.

Atlas Wealth Advisors S&P 500 All Time High Dallas Wealth Advisors

Source: A Wealth of Common Sense

As you walk along your wealth journey, there will be times when you get nervous and it will be your emotions that pull you off your path, not facts. Fact based decision making doesn’t have room for knee-jerk reactions because the only way you know when the market has reached its top is after that moment has passed. Thankfully, your journey isn’t about getting rich quick or keeping your investments from feeling any of the effects of the market. If you did, they wouldn’t feel the highs either.

Instead, when you see the market hit record highs, remember your map, check in with your plan and feel free to reach out to your guide.

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