After 2020's Market Crash, How Should Investors Prepare?
What the shortest market crash in history can teach us about weathering volatility.
Scott Halver: Looking at the market today, it might be easy to forget where we were at around this time last year. It was February 2020, that the stock market plummeted. The COVID lockdowns followed. One year later, we're still feeling our way out of this pandemic, but the market has made a full recovery and then some. Still, the movements of this year reminded us of the pain and uncertainty of market crashes. Are these kinds of drops normal? Was anyone ready for it? What should an investor do now to prepare for the next crash?
The global financial crisis and subsequent market crash that ended in 2009 has been described as a "black swan," a unique negative event that could not be foreseen because no similar events had occurred in the past. However, if we look at historic data, we can see that there is a long history of market crashes.