Over past few months, and even years, investors who have braved getting back into the market have enjoyed strong returns. That is a fact. However, in recent conversations, a few investors seem to be getting increasingly nervous about the pending "correction" coming. In their view, the market is "too high" and has to come down. And as such, they are shelving any long term investing decisions. In fact, it wasn't just this year, but even in 2012. Those investors have lost out on what was a prosperous 2013 thus far.
In one respect they are right. The market will, as it always has, go down from time to time. It is not a straight shot up. The point to take from the question is, that even if they are right, what is the long term consequences? I would argue, nothing. A bear market is usually defined as a market decline of 20% or more. If I look back at history, we have had a bear market, or worse, in every decade (including the 90s) in recent memory. However, if you were a long term investor over those years, these bear markets were nothing more than a great buying opportunity, and were not a portfolio destroying event. As long term investors, it is vitally important to keep a long term view, and not be influenced by the day to day hype.
