Also, the companies that simply declare bankruptcy but stay in business will come out of this quite nicely. They'll be able to shed debt and keep on doing whatever it is they always did. So when you read that Company X is declaring bankruptcy, it may not mean that it's shutting down.
Here's something else to keep in mind: Two years out of every three the market goes up. And most gains and losses occur in a very short time span, which is why timing the market is a fool's game. In fact, I have in front of me a chart from an annuity company that says in the past 94 years, 69 of them had a positive return in the market, and 25 of them had a negative return. The Great Depression did start with four years in a row of negative returns. Then in 1933 the market went up 54%.
I wish I could find this chart on line so I could share it, because it really is quite fascinating.
The most essential thing is to understand that the economy and the market are two very, very different things. And that in the long run staying invested is a very good idea. It may be that taking some profits out now would make sense for an individual. But selling everything, as some have advocated, because the market is going to crash, crash, CRASH any day now, shows a lack of understanding about how the market works.
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