Avoiding market volatility may sound good in theory, but volatility is the price of admission for the stock market. I’m sharing the charts below because today is the 13th year anniversary of the GFC lows. Since then, there have been plenty of declines like our current one.
Each decline had its own story attached to it. There will never be a time when it’s “all good”. And it’s common for investors to have the urge to sell during market drawdowns. But if you view volatility as a fee for admission to long-term returns, you will have a better chance of riding it out.
Stocks have historically been the greatest wealth generation machine. It’s not by mistake that the wealthiest 10% of Americans own 89% of all US stocks.
Since 1926, the stock market has returned 10.5% annually. During that time there was The Great Depression, numerous recessions, World Wars, pandemics and much more.
Bottom Line
It’s the media’s job to get you to tune it, but it’s our job to help people focus on their long-term goals. History has shown that the stock market has rewarded investors for riding out volatility. Big returns amid constant chaos and volatility have happened throughout the entire history of the stock market.
George Maroudas
847-550-6100
george@pmgwealth.com
Twitter @ChicagoAdvisor
Disclaimers and Sources:
Chart from LPL Research
S&P 500 Data from FactSet Report
Reason to Sell Chart Link here
Wealthiest 10% own 89% of Stocks CNBC
Chart data from YCharts
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Please consult your financial advisor regarding your specific situation. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. All investing involves risk including loss of principal. No strategy ensures success or protects against loss. This information is not intended to be a substitute for specific individualized tax advice. The Standard & Poor’s Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
