Why Long-Term Investing Is Smart In Volatile Markets

In a time where everyone is unsure about the future, specifically about the state of our economy, war across the globe, the mental and physical health of our society, and so much more, it is completely reasonable to be anxious about your wealth and the financial stability of your families’ legacies.

While each of these current issues deserve our attention and concern, there is no reason to abandon your strategy when investing for the long-term.

Let’s think about all of the major economic events since the 21^st century began:

Dot-com Bubble
9/11 Attacks
War on Terror and Iraq War
Hurricanes Katrina and Rita
Housing Crisis
Great Recession
Global Pandemic
Russian Invasion of Ukraine

Would you have stayed in the market if you had known these events were coming? Would your emotions have taken over and caused you to pull out of the market in fear?

Well, let’s take a look at what happened in the market during this time.

From January of 2000 to December of 2021, the S&P 500 returned, on average, 10.2% a year.¹

A dollar invested at the beginning of the period would be worth about $10.25 at the end of the period.²

These returns are very much in line with what we see in the market over long-term periods. The market tends to be resilient even through the hardest of times.

We have seen a great deal of news over the past 20 years or so, much of it was negative, but much was positive as well. The net result was a very reasonable stock market performance, some may even call it generous.

Human ingenuity created incredible innovations throughout history, and there are still plenty of opportunities out there. GDP in the year of 2000 was about $10 trillion, and as of last year, it was at $23 trillion. Uncertainty has historically led to innovation because that is human nature, and we expect that to continue throughout this time.

We are never going to say that we know exactly which direction the market is headed, but we do believe one of the best investment strategies is to keep history in mind.

There is no need to panic. We have your back. No surprises. Just results.

FOOTNOTES

²Data presented for the growth of $1 are hypothetical and assume reinvestment of income and no transaction costs or taxes. This value is for educational purposes only and is not indicative of any investment.

SOURCES
https://my.dimensional.com/worried-about-stocks-why-long-term-investing-is-crucial
https://www.google.com/search?q=sp500&rlz=1C1GCEA_enUS969US969&oq=sp500&aqs=chrome.0.69i59l2j0i131i433i512j69i59j0i131i433i512l3j69i60.2541j1j7&sourceid=chrome&ie=UTF-8

DISCLOSURES
Investments involve risks. The investment return and principal value of an investment may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original value. Past performance is not a guarantee of future results. There is no guarantee these strategies will be successful. BNY Mellon | Pershing is our clearing and custody provider. Olistico Wealth, LLC, a registered investment adviser. Pershing and Olistico Wealth, LLC are separate, unaffiliated companies, not responsible for each other’s services or policies. Pershing LLC (member FINRA, NYSE, SIPC) is a BNY Mellon company.