The Bad News Is Old News

In my previous post, we reviewed the historical evidence on bear markets and financial crises, as well as the sources of the latest crisis. Today, we pick up by discussing reasons why all the bad news you’ve been hearing doesn’t mean you should reduce your equity allocation.

Reasons Not To Panic
First, all this news is well-known, and thus should already be incorporated into prices. Although we never know if markets will drop further, or to what extent they might fall, selling now would be like driving forward while watching the rearview mirror.

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