Should you Panic now.The answer is no.But that’s precisely what...

Should you Panic now.
The answer is no.
But that’s precisely what many investors are doing now by taking money out of the market or rotating them to stocks they perceive to be safer. There is a better way to learn from history.

Take the long view

If you want to sleep well while building your wealth for the long term, you must take the long view of history. Then you’ll be more like Warren Buffet who see the current market madness as normal and transitory.

So what can we expect the stock market to do during a recession-and after it? I may not have a crystal ball to see the future, but I have made an in-depth study of all nine recessions since 1950. Even if history won’t repeat itself, looking at the past half-century should give us some perspective.

How long does the average recession last?

Since 1950, a typical recession lasted for ten months. The shortest one lasted for six months and the longest one lasted for 16 months.

By the third year on average over the last nine recession the market was back up 28%.

So if history is any indication since 1950 the market will be back up 28% in three years say 2012.

Something to think about?