Why investors should not make knee-jerk decisions based on bad news

The greater the drawdown, the greater the danger of selling in a panic and locking in losses. PHOTO: REUTERS
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When financial markets teeter, as they have since 2022 began, there is no shortage of speculation about where they are headed. Morgan Stanley warned recently that March would be a brutal month for stocks.

One financial adviser echoed that sentiment, saying that “there will be a lot of volatility in the markets” and “lots of chances to put cash to work at attractive levels”.

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