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The stock market, powered by strong corporate earnings and the overall economic recovery, just keeps going up and up. The Dow Jones industrial average sets new records almost every week with relatively little volatility.
Greg McBride, chief financial analyst at Bankrate.com, says this ride won’t last forever.
“Don’t get too used to that,” he said. “We will encounter volatility again, as we always do. Remember, markets just don’t go up; they can go down from time to time as well.”
McBride says what’s happening right now isn’t normal. We need to prepare ourselves for the inevitable, so we don’t freak out or bail out when that inevitable correction takes place.
“We’re overdue for a correction. We haven’t seen a year with this little volatility in about 20 years, so this just goes to show that this is not typical,” McBride said. “Markets go up and down and the time to buy is when people get nervous. So when you see the market pull back, don’t bail and head for the exits. Instead, buckle that seatbelt a little bit tighter and put more money to work.”