VDE - Should I Sell My Stocks?
It's been a wild and unprecedented ride for global stock markets. As of this writing, the S&P 500 is down 20% from its all-time highs set in late February 2020 -- making this one of the fastest-ever corrections on record. Many individual stocks are down even more. Farewell bull market (though I'd argue it was short-lived anyway, since the market declined just a smidgen under 20% in the fourth quarter of 2018).
Granted, a pullback shouldn't be surprising. Nevertheless, the reasons for it and the severity of the sell-off in recent weeks is. And to be sure, there are some reasons to be worried. Coronavirus started out as just another potentially worrisome illness -- those constantly pop up as threats every year -- but has spread into a pandemic that is sure to be at least a short-term weight on the global economy. The oil production war between Russia and Saudi Arabia isn't going to help either, putting many heavily indebted and energy price-dependent U.S. shale producers (and owners of their debt) at risk.
But is it time to sell? By and large, for long-term investors the answer is no, especially if it's fear-driven selling. At the very least, when unsure of what to do, the best course of action is often to sit on one's hands and do nothing at all. As has played out countless times in history, this too shall pass. Even if stock prices continue to fall, they will eventually rally.