When looking at what captures eyeballs, it frequently is extreme events that we don’t see everyday. With the recent market volatility, everyone is captivated (and horrified) by 1000 point swings in the Dow Jones Industrial Average.
While those numbers certainly seem large, it is mainly because the stock market has expanded quite a bit. A 1000 point swing when the market was at 10,000 would be a 10% loss. When the market was at 26,000, it was less than half of that.
What we also point out to retirement investors is the Dow is a fairly narrow measure of stocks. When we look at how someone is invested in a globally diversified portfolio, they hold thousands of stocks from many different countries. Not just 30 from the US. If they are closer to retirement, they also in all likelihood don’t have 100% of their portfolio in stocks (or hopefully don’t). Sticking to the basic fundamentals of consistently investing during both market expansions & contractions as well as rebalancing on an ongoing basis are the simplest ways to stomach the eyeball test.