While no one enjoys a market correction, long-term investors understand that they are inevitable, can be expected every couple of years, and are part of the price of admission to the stock market.
And the surest way to turn temporary declines into permanent losses is to panic and sell. You then have the additional burden of trying to figure out when to get back in.
Or you can stay invested and stay focused on the long-term.
And to help you do that, you may want to watch this three-minute video, which shows how $1 invested in the total U.S. market grew from 1927-2017 — as well as what was in the headlines in Time magazine. As the video validates again and again, short-term news events and downturns generally have had little long-term effect on the market’s continuing growth.
Over this period, the U.S. went through 15 recessions or depressions, World War II and Vietnam, and other crises big and small. Yet $1 invested in 1927 could have grown to more than $6,229 by the end of 2017.
That’s the power of free markets powered by human innovation to create long-term wealth.
Source: Fama/French Total U.S. Market Index – provided by Fama/French Center for Research in Security Prices (CRSP) data. Includes all NYSE securities (plus Amex equivalents since July 1962 and NASDAQ equivalents since 1973), including utilities. Hypothetical value of $1 invested at beginning of 1927 and kept invested through December 31, 2017. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment.
Stock investing involves risks, including increased volatility (up and down movement in the value of your assets) and loss of principal.
Investors with time horizons of less than five years should consider minimizing or avoiding investing in common stocks.
Indexes are unmanaged baskets of securities in which investors cannot directly invest; they do not reflect the payment of advisory fees or other expenses associated with specific investments or the management of an actual portfolio.
Past performance is no guarantee of future results.