A sell-off in the U.S. stock market that began last week worsened on Monday, as the major indexes wiped out their year-to-date gains.
Since hitting a record high on Jan. 26, the Standard & Poor's 500 Index has fallen 8.5 percent. Meanwhile, the Dow Jones Industrial Average tumbled more than 1,100 points Monday, its steepest decline since 2011.
What's to blame? Investors are spooked about signs of faster inflation, which could lead the Federal Reserve to raise interest rates more times this year, thereby raising borrowing costs for companies and consumers.
While Monday's drop was the biggest in years, it's important to put the recent losses in context. The U.S. stock market today is essentially at the same level it was about two months ago. That may be of little comfort as the value of your portfolio shrinks, but should the market plummet even more dramatically at some point, this dip will serve as a trial run. And the good news is, the stock market is resilient, so you'll make it through this sell-off — and future ones — with a little patience.
Staying invested for the long haul is the most prudent approach, especially when it seems you should run for the exits. Here are three ways to cope with those times.