Being a disciplined, long term investor can sometimes be challenging. We’re in a period right now, in fact, where the stock market has been slowly trending lower for the last few months.
It may not feel like it, but these times are completely normal and have happened over and over again.
In this video, I share 3 Charts Every Investor Should Know to gain confidence and perspective during uncertain times.
Here are some key takeaways:
- Stocks, Bonds, Bills and Inflation: Whether you’re investing to stay wealthy or you’re actively saving to become wealthy, having an allocation to stocks in your portfolio has produced inflation busting returns over time relative to Treasury Bills (cash/money markets) and Long Term Government bonds.
- There’s Always Reason to Worry: There are always reasons not to invest in stocks. If you think what we’re currently experiencing is unique (geopolitical risks, recession fears, Washington dysfunction) just look at some of the historical events the market and economy have been through and still climbed higher.
- S&P 500 Annual Intra-Year Declines: Not only are downturns in the stock market common, but they should be expected. The S&P 500 has been down at some point during any given year by an average of 15% since 1990. Yet in 26 of these 33 years (almost 80% of the time) the S&P 500 still finished positive for the calendar year.
Finally, if you’re feeling uneasy about current market fluctuations, I discuss three things you can do right now:
1. Turn optimistic/opportunistic.
2. Tune out negative news and negative people.
3. Tune into your goals.
Enjoy the video below and please let us know what you think.