BLOG: Thirty Years of Reasons Revisited
In March, 2020, at the height of the COVID scare, when markets were in turmoil, I wrote “Thirty Years of Reasons,” which featured a list of the many terrifying headlines that might have caused investors to sell out of their portfolios between 1990 and 2020.
In the 30 years prior to that writing, the S&P 500 had risen from 353 to just over 2,750, and I urged everyone to stay invested.
In the three years since, we’ve experienced the COVID pandemic, Russia’s invasion of Ukraine, record-high inflation, and the potential for the United States to default on its debt payments. Despite those headlines, the S&P now stands at nearly 4,200, up from 2,750 just three years earlier (an increase of more than 50%).
The lesson here, in my opinion, is that, despite the negative headlines the media would have us panic over, there are many positive developments that go unmentioned simply because bad news sells.
For example, there’s no denying that COVID was a horrible disease that caused tragic deaths worldwide. The media, naturally, was relentless in covering the terrible news every day. In my opinion, it was unfortunate that far less attention was given to the tremendous advances in science that enabled several companies to develop vaccines within a year of the outbreak— which was unprecedented and astounding. Ground-breaking advances in technology and medicine are happening quietly, every day, which enable the great companies of the world (which we invest in) to continue to increase earnings over time. This has happened since the beginning of investing, and it’s the reason we stay invested.
So, in order to keep a running total and to reinforce my advice that staying invested is usually the best plan, I present the most recent Thirty Years of Reasons:
Bombing of World Trade Center
Orange County, CA, files for bankruptcy
Oklahoma City bombing
US Budget Crisis / Gov’t Shutdown
Russian Financial Crisis
President Clinton Impeached
Dot-com Bubble Bursts
N5H1 (Avian Flu)
War in Iraq
Indian Ocean Tsunami
North Korea’s First Nuclear Test
Great Recession / Financial Markets Seize
Stock Market Collapse
Japan Earthquake and Tsunami
US Gov’t Shutdown
Collapse of Oil Prices
Economic Slowdown in China
Brexit and President Trump Elected
President Trump Impeached
COVID Pandemic Hits
Russia Invades Ukraine
Record High Inflation
Debt Ceiling Crisis
As I’ve mentioned in the past, it’s always unsettling when a significant event causes your portfolio to temporarily lose value but, as you can see from the chart above, it’s a fairly common occurrence. Oftentimes, the best move is no move at all.
As always, please don’t hesitate to contact me with any questions.
You cannot invest directly in an index.
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.
Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
Investing includes risks, including fluctuating prices and loss of principal.