The Smartest Vanguard Index ETF to Buy With $500 Right Now

It's been a tough month or so for stocks, with the major U.S. stock indexes falling sharply from their earlier highs. The market has been rattled with the threats of tariffs and a growing sense that the U.S. is headed toward more isolationist policies as it pulls back from its allies. Meanwhile, the Atlanta Federal Reserve model is now predicting the U.S. economy will contract in the first quarter after forecasting solid economic growth just a few weeks earlier. That could be the start of a potential recession.The first thought among investors may be to stop investing in equities or even sell off their holdings and move more toward cash. However, I'd advise against that. Even if we enter a bear market, which is a decline of 20% or more, recent history suggests that they tend to be relatively short. Since 1929, the average bear market has lasted about 9.6 months, which is much shorter than the average bull market, which lasts close to 1,000 days, or 2.7 years. Meanwhile, some recent bears markets have been much shorter. The Covid bear market was sharp but only lasted about a month, while the 1987 bear market also saw a steep -- but short -- decline of only about three months.Both of those bear markets also preceded some very strong returns quickly after they ended. In fact, new bull markets, on average, see gains of about 25% in the first three months of starting, and nearly 75% of the time, their biggest gains typically happen during the first half of the bull market. This means that even if you correctly time selling off your holdings to avoid a bull market, you're likely to miss the big gains that happen when the market turns.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool