Outside the Box: Why you shouldn’t panic about the stock market volatility

So we’re all poorer, right?

The S&P 500 SPX, +1.49% stock index has fallen 10.2% over the past nine trading days. Yet all we’ve done is give back a sliver of the huge gains notched since 2009. My contention: Not only is much of the handwringing unjustified, but arguably it’s also wrongheaded.

Seasoned investors don’t get nervous when the market declines. Rather, they get excited by the prospect of buying shares at much cheaper prices. So far, there hasn’t been much to get excited about because valuations remain rich. One indication: Despite the 10% slide, stocks are still trading at 23.5 times 2017’s reported earnings, 22% above the 50-year average of 19.2 times earnings.

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