Sick of Swings? Same… But History Is on Our Side
The Nasdaq is falling again after Wednesday's rally. If the past month's swings have worn on you, here's how we're thinking about them.
The Nasdaq Composite fell more than 4% on Thursday after artificial intelligence (AI) stocks, particularly chipmakers and data center names, dropped for a second day. Qualcomm saw a sharp decline after smartphone chip sales fell below expectations. Arm Holdings and Micron Technology also saw losses despite reporting record revenues and a 7% drop the previous day, respectively. The Nasdaq remains below its record close from October 6.
AI-linked stocks experienced significant volatility this week, with drops on Monday and Tuesday, relief on Wednesday, and a return of the red on Thursday. This rollercoaster has been tough for investors, especially those with stakes in AI stocks. Motley Fool co-founders Tom Gardner and David Gardner emphasized the importance of patience and diversification.
They suggested holding onto stocks for at least three to five years to avoid reacting to short-term market swings. Additionally, they recommended keeping new investments modest to limit potential losses. Despite the recent turbulence, historical data shows that the stock market has generally trended upward with an average annual return of about 11%, including dividends.
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