Cash panickers: Coronavirus market volatility
05 August 2020 | Topical insights
The global pandemic and corresponding lockdowns in the first half of 2020 caused the sharpest and deepest economic contraction in modern history, with U.S. markets falling by 34% from their February highs in a matter of weeks. This decline could have tempted even the most disciplined investors to panic, but as our new research illustrates, less than 0.5% of Vanguard investors moved to cash.
This research examines how a small subset of Vanguard U.S. investors who panicked, abandoning equities and moving the proceeds to cash, fared during this period of heightened volatility. Our findings reveal that more than 80% of these cash panickers would have been better off if they had simply “stayed the course”.
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