It’s hard to know when it is a good time to “sell” an investment. But most of us know when it is a good time to “buy” an investment. It is important to remember the market will decline three to nine percent around five or more times a year. A more closely watched decline is considered to be a correction, defined as 10% or more, and it happens on average, once per year. When the market declines more than 20%, it’s usually called a bear market and happens once every 3-4 years on average.
Warren Buffet has insightful advice regarding investing: “Be fearful when others are greedy and greedy when others are fearful.” When the market is down 10-20% or more, it is generally a good time to invest some extra cash for the long-term investor.