Despite periods of short-term decline, the market’s recovery over the long term has tended to reward those who remain invested. Notice how an investment of $10,000 in various asset classes could have grown over the years.
Over the long term, financial markets tend to reward the risk taker.
But keep in mind, the investment markets offer you a number of different roads that you can take. For example, suppose you would have invested $10,000 in an interest-bearing cash account back in 1979. By the end of 2019 it would have grown to $ 55,345, and it would have been a nice smooth drive the whole way, never losing money in any calendar year.
Let’s say instead, you took the bond road back in 1979. You’d have over three-times more money. But you would have hit some pot holes along the way; and some of them were big and deep – your worst year loosing 18.3%.
And what about the stock road? Every investor dreams about turning $10,000 into $860,308, but it likely happened only for those that stayed on the road the entire time - even when it felt like they were driving off a cliff!
can you stay on that road?
Your chances of generating a positive return in the stock market improve the longer you stay on the road. To date, there has never been a 15-year holding period where investors lost money. Of course, this does not ensure a profit or protect against losses when the markets decline.
So, how do we apply this lesson from the past
to today’s bumpy stock market?
Think of your 401(k) strategy like directions
to your dream vacation’s final destination…
don’t stray off the beaten path and get lost!
Reviewing your current investment goals and objectives along with your risk tolerance is important in down markets as well as up markets. If you have any questions or concerns about your current situation, please give us a call at 800-880-4015 or send your advisor an e-mail.
Investment advisory services offered through intellicents investment solutions, inc., a federal covered investment adviser.