Investors composed amid stock upheavals

Global economy to stay strong, analysts predict

NEW YORK — This month’s selloff for stocks marked the first big test of investors’ mettle in years. And many ended up doing exactly what the experts were recommending: holding steady.

Even as stock markets tumbled around the world, halting an unusually calm and strong ride upward, many investors resisted the urge to sell in a panic and lock in the losses. Others plugged even more cash into their trading accounts after seeing prices for S&P 500 index funds drop by 10 percent within a couple of weeks.

At Fidelity’s retail brokerage, for example, customers continued to put in more buy orders than sell orders after the S&P 500 began falling from its peak, set Jan. 26.

“Millennials and Gen Xers are definitely taking advantage of these prices and taking advantage of the sell-off,” said Scott Ignall, senior vice president and head of online brokerage technology at Fidelity.

Experts typically recommend investors stay the course when stocks go through volatility. Stock prices can suddenly bounce, as they did this month when the S&P 500 followed its worst week in two-plus years with its best in five years. But stocks aren’t supposed to be shortterm holdings, and they’ve historically delivered better returns than other investments when held for the long term.

Beyond that, many voices along Wall Street were encouraging investors to “buy this dip.” Worries about higher inflation and interest rates sparked the sell-off, but many analysts said they expected corporate earnings and the global economy to stay strong, which should help stock prices recover.

The buying likely played a role in what has been a quick rebound for stocks. As of Friday’s close on Wall Street, the index had roughly halved its loss and was down only 4.9 percent from the record.