Over a three-day losing streak, the S&P 500 dipped more than 6% before rallying again Tuesday. “This is what an emotion-driven market looks like,” said Mark Hackett, head of investment research for Nationwide. “You had a three-day period that was really very challenging. But the drop was not justified by the data that was out there.
“So when the market itself reverts to the mean and rises again, you take advantage of having bought at cheaper prices, and that adds to the value of your portfolio.” In terms of selling, though, he said the best advice for most investors is to do nothing and wait for the volatility to cool down. “Whenever you invest in stocks it’s important to be mindful of your time horizon,” Alev said.