Trend-Following Can Cut Risk
Bad performance tends to cluster.
A version of this article appeared in the April 2019 issue of Morningstar ETFInvestor.
Over the long haul, the stock market has been a great investment, and it will likely continue to be. But its path is far from smooth. At times, it can be downright scary. Gut-wrenching volatility and ominous headlines can cause even seasoned investors to abandon stocks, which can derail a well-thought-out investment plan. That's why it's important to plan for the market's inevitable downturns before they happen.