Page 33 - April2022

“It is in times like this when we take a trip back in time and find that these events are more common than we realize, and long-term investing tends to be the most successful route.”
FINANCIAL PLANNING
every two years, on average. Everyone will say: “Yeah, but this is different.” The Russian invasion is a scary thing. War in general stems unease and worry. I have provided a chart below to illustrate how the S&P 500 performed during periods of war or invasions similar to what we are seeing in 2022.
This chart is provided by my friends at First Trust. As you can see, there are numerous war time periods on this illustration. Some of these wars involved the full force of the United States. During each one of these periods of time, people were concerned with their investments. I’d
like you to take a look at the line in the middle of the chart. That represents the S&P 500’s performance since 1928. With all the conflict between countries in almost 100 years of data, the performance is still at a steady incline.
Wars aren’t the only cause of concern. Gas prices have recently hit an all-time high. The United States is energy dependent. We have placed strict sanctions on Russia, and we just recently banned all oil imports from Russia. However, we are still relying on foreign oil. Inflation at the pump is one of the many reasons why Americans are fearful about the future. A recession is worrying many, especially retirees. I have one more chart I’d like to share. This chart shows the growth of $10,000 based on S&P 500 Index performance dating back to 1970. This illustration attempts to show how resilient the market is regardless of any major crises and events that take place.
If you refer to some of these events, you’ll find that they are very important
parts of history. This chart consists of
Black Monday, the 9/11 terrorist attacks,
the Boston Marathon bombing (my dad
ran the marathon the year of the bombing) and several other life changing events. That $10,000 investment that we started with would have grown to $2,134,944. Despite all these events that caused so much uncertainty, the market still performed well.
In closing, I want to remind you all
that these crisis events are common. The mainstream media is extremely good at getting people to worry. There will always be a topic reported that raises some uncertainty. It is in times like this when we take a trip back in time and find that these events are more common than we realize, and long-term investing tends to be the most successful route.
SPEEDHORSE April 2022 31