In our letter on June 17, 2022, we examined a rocky time in the markets. Stocks were down 22.4%, and bonds were down 11.3%. But history whispered a hopeful message: On average, after stocks fall by 20%, they bounce back 22% the next year.
In that letter, we shared this chart – please take a look at the middle column circled in red:
Now that a year has passed from the original letter, the results are in. And the historical averages held. Stocks are up 21.3% as of yesterday. It might not feel like a big leap, but it’s a solid reminder that playing the long game pays off.
The media’s roller-coaster focus might blur this, but the numbers speak for themselves.
OUR TAKE: The news often amplifies storms into hurricanes. Not every recession is a 2008-style crisis.
So, the big question that you may be asking is what to do now?
- Reevaluate: Align investments with your goals.
- Diversify: Especially in retirement.
- Stay the Course: Do you know any successful market timers? 😉
Investing almost always feels uncertain. If it were all smooth sailing, everyone would put their money in the market instead of the bank.
