Step Back and Take a Deep Breath
For investors with big allocations to risky asset classes, such as stocks and commodities, the past week or so has been a tough stretch to endure. Major indices have posted lengthy losing streaks, erasing billions of dollars of wealth in a relatively short period of time. Anxiety has been through the roof recently as concerns have intensified that the U.S. may be heading for a double-dip recession. However, those fears are way overblown. The market is simply experiencing a bit of a correction after stock prices raced ahead of their fundamentals and some irrational exuberance pushed equity markets to unsustainable heights.
Ever since markets bottomed out in early 2009, the market has been in a pattern of two steps forward, one step back. Stocks have generally climbed sharply higher over the past few years, occasionally pulling back -- sometimes dramatically so -- after big rallies....394 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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