The share market is the best place for wealth creation for most people, however volatility is the price of admission into the share world.
Australian and indeed global markets have been almost worry-free for the past five years, at least since Greece was rescued from its problems in 2011 and 2012.
Central banks and governments have worked exceptionally hard to keep the global economy on track. Asset prices across the board have done very well. Property, shares, bonds and lots of other assets have had an incredible run.
But, it now looks like the tailwinds are about to become headwinds. Interest rates are now heading upwards. Central banks are going to unwind their balance sheets. Debt ratios are at almost all-time highs.
Australian companies are not impervious to these changes. The big banks have all suffered in recent times and the royal commission is also unearthing some troubling practices. The Commonwealth Bank of Australia (ASX: CBA) share price hasn't done much over the past five years. The Telstra Corporation Ltd (ASX: TLS) share price has fallen substantially over the past few years.
Arguably, the Australian share market isn't that expensive but if the global share market gets sick Australia could suffer too.
Should we fear this stock market crash? If you own businesses that are going to grow in the long-term then it shouldn't matter that much. Indeed, a crash could provide an excellent opportunity to buy shares at discounted prices.
Foolish takeaway
Nearly every reader's portfolio has at least 20 years to go, which is double the length of time from the GFC to today. If a crash were to occur, the market will recover in time.
