Part 2/10:
The prevailing urge during crises is to react impulsively—going full into cash, jumping into oil, defense stocks, or tech stocks in a panic. While these moves might seem logical in the short term, history demonstrates that they often hinder long-term growth. Sitting in cash during turbulent times exposes your portfolio to inflation erosion; your purchasing power diminishes by roughly 45% over a decade if inflation runs at an average of 3% annually. Conversely, stock markets have weathered wars, pandemics, and political upheavals, delivering consistent returns—often around 10% annually over decades.