Looking back to 2020, how did investors react to the pandemic? The numbers may surprise you! Watch this week's Arista Advice to find out the specifics.
Hello, welcome to Arista Advice. Question of the week is: "Paul, looking back to 2020, how did investors react to the pandemic?"
In 2020 we will all say, it was a year that we'll all remember for many years to come. We saw a mix of a bag of results of people that did many things during 2020. We have some insight from Dalbar, a Boston-based consulting company that's been around since the mid-1970s. Let's look at their results.
In response to the market crisis in March, 30% of investors reallocated assets.
28% of investors invested more while prices were low and added to their portfolio.
26% of investors did nothing, and then the smallest number, according to Dalbar, only 15% of investors cashed out.
Be prepared for volatility, uncertainty in the market, and when it happens, stay put, don't react and many times turn the TV off or the radio, or the television or the news and get back to a normal life. Those that sold in the 15%, I'm sure they're regretting that they reacted to the short-term news.
Always remember to stay invested and be a long-term investor in a short-term world. Remember, go to AristaWealth.com