When It's Foolish To Sell

Since World War II, there have been nine major crises precipated by political factors, going back to the 1948 Berlin blockade, which raised the specter of another world war.

During each crisis, investors felt confused, uncertain, and panicky. Nothing in their experience, they believed, would help them cope with the ominous world they faced, so they were advised to sell and save their capital.

As it turned out, this advice was wrong: stocks were 16% higher a year later, on average, and 33% higher two years later.

Among those nine crises, the worst - in terms of stocks - was the 1973 oil embargo. After two years, the market was still slightly off. But nevertheless, patient investors profited from the bull market that began in 1982.

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