On the evening of Friday, August 5, 2011, Standard & Poor's did the unthinkable...

It downgraded the credit rating on U.S. government debt – for the first time ever. Our country went from a perfect "risk free" rating of AAA down to AA+.

The decision was a gut punch... not just for investors, but for all Americans.

At the time, Republicans held the House of Representatives, while Democrats held the White House and the Senate. Raising the debt ceiling became a bargaining chip, with the two sides squabbling over how to cut spending (and by how much).

The U.S. came within just 72 hours of a true default on its debt.

Here's what Standard & Poor's said when it released its decision...

The downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges...

The political brinkmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed.

The news shook confidence in the U.S. as the leader of the global economy.

This wasn't the signal you might expect for investors, though. It wasn't a reason to sell.

Falling into the trap of selling on bad news – even during seemingly historic events – is often a mistake. And as I'll share today, the recent market volatility isn't a reason to sell either...

The game of politics caused the S&P downgrade in 2011. Of course, both sides of the aisle criticized the downgrade – and then criticized each other. (And yet, more than a decade later, we're still having debt-ceiling battles... Lesson not learned.)

Worse, the credit downgrade spooked investors. And if you were looking for a reason to sell your stocks in 2011, that was it.

The country was still digging itself out of the worst recession since the Great Depression. Just about everyone expected a long-term period of slow growth.

Plus, stocks were already suffering. They'd dropped 12% from their April high. And they collapsed another 6.7% on the Monday after the S&P announcement.

The downgrade marked the worst day for stocks since December 2008, in the thick of the great financial crisis. To most people, it looked like the inevitable start of "Financial Bust 2.0."

Except that isn't what happened... not even close.

The S&P 500 Index barely fell any further than the lows of that Monday. A year later, the market was up 28%. Two years later, it was up 58%. And four years later, the market had more than doubled.

The point here is simple: If you're ever looking for a reason to sell, you'll rarely have trouble finding it...

There's always another boogeyman lurking in the shadows... another "black swan" event waiting to show its face. But once you study history, you begin to realize that the constant barrage of fear rarely turns into anything meaningful. It usually doesn't matter at all.

Since 2010, we've seen the U.S. debt downgrade... a European debt crisis... multiple U.S. government shutdowns... an Ebola scare... a collapse in oil prices... Brexit... and political unrest.

I could go on and on. You can always find a reason to worry about stocks. But even global issues simply don't move markets for long.

We're nearly three-quarters of the way through 2024... Yet many investors still don't trust this bull market. The media is full of fearmongering about current events, including this year's presidential election.

But history is clear... Falling into these fears – and selling stocks – is rarely a good idea.

The worst-case scenario almost never arrives. And when it doesn't, stocks tend to keep going up. Selling means you'll miss out on those gains... Plus, you'll likely struggle to decide when to get back in.

So yes, I get it. With the recent market shake-up and looming election, it might feel like a good time to get out of stocks to "wait and see."

History shows that's a mistake. I urge you not to make it in your portfolio today.

Good investing,

Brett Eversole