Investors Advised to Stay Calm During Stock Market Volatility

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As the stock market experiences significant volatility amid global events like the war in Iran, financial experts are advising investors, especially those with long-term horizons, to remain patient and avoid making hasty decisions to protect their retirement savings. The article cites the market's historical track record of recovering from steep drops, and notes that trying to time the market is extremely difficult.

Why it matters

This story is relevant to many investors, particularly those with 401(k) or other retirement accounts heavily invested in the stock market. It provides reassurance and guidance on how to approach market turbulence, which can be psychologically challenging but often the best long-term strategy.

The details

The article discusses how the war in Iran has disrupted global oil supply, sending prices as high as $119 per barrel and potentially reaching $200 if the conflict continues. This has contributed to the S&P 500 being on track for its fifth straight week of losses, nearly 8% below its all-time high. The Nasdaq composite has already dropped more than 10% from its peak, entering 'correction' territory. However, the article notes that steep market declines of 10% or more are common, and often serve to 'cull optimism' that could otherwise drive prices too high. Experts advise against making knee-jerk decisions to sell stocks or move 401(k) investments, as this risks missing out on the market's eventual recovery and future gains.

• The S&P 500 is on track for its fifth straight losing week, which would be its longest such streak in nearly four years.
• If the war in Iran continues until the end of June, strategists say the price of oil could reach $200 per barrel, surpassing the previous record of just above $147 set in 2008.

What they’re saying