What were people worried about in 2014? Looking at the chart above of frequent Google searches, you can see that there were some big news events last year. Ebola in the U.S. was a big concern in October. And about the time that Ebola worries were at their peak, the S&P 500 hit a low…
Meanwhile, almost no one was searching for “diversification,” though that will have a much bigger impact on portfolios over the long-term than almost anything in the news.
In mid-October, the S&P 500 was basically flat for the year. For more than 9 months investors had held onto U.S. Large Cap stocks and had no gains to show for it. But by the end of the year, that index actually finished more than 13% higher. Those gains in the S&P 500 for 2014 occurred during the last few weeks of the year.
This is a great reminder that market returns can occur very suddenly and very unexpectedly, and they often require you to be invested during times when panic is pretty high.
There will always be headlines to worry about, but we don’t have to let our long-term plans suffer by reacting to them.
For more information on what happened in the markets at the end of 2014, listen to a recording of our recent 4th Quarter-in-Review webinar.
Past performance does not guarantee future results.