This post was originally published in 2016 on my old website. Shin
So. Britain voted to exit the EU. What’s that got to do with the US stock market? Well, I guess a lot, as it plunged the day the news was released, or maybe, the day after.
Yep.
The market took a Nose Dive, again.
Why?
I don’t know. Emotion is the only thing that I can think of. Fear.
Fear that it’s all gonna go “South.”
Well, it did. The market plunged.
BUT!
I didn’t lose my money.
What? Shin, how did you not lose any of your money when the market plunged?
Well, my portfolio is still larger than my initial investment. AND! I’ve been drawing off each month. It’s paying for my early retirement.
?????!!!!!
I know! How the hello does this compute?
Well, Hal, the only thing that I’ve lost is growth. It wasn’t my money that I lost, it was the money that my money made. MY money is still in my portfolio!
If you look at the history of the market, you’ll see that it’s gone down and come back up again. Mostly up. That’s how it works. That’s why the market is the place to invest.
Here are a few articles of interest:
S&P 500: Total and Inflation-Adjusted Historical Returns
Is the 7 Percent Return for Stocks Extinct?
8 lessons from 80 years of market history
Investors question wisdom of 10% rate of return rule
How Have Stocks Fared The Last 50 Years? You’ll Be Surprised.
Having invested in the market since the early ’90’s, we’ve seen ups and downs. Even with the downs, we’ve had growth, as we’ve invested in funds, not individual stocks. That way we’ve done very well and haven’t put ourselves in the position to lose big.
Most people think of volatility as a bad thing but in actuality, it’s the very reason that the market sees growth.
So, I haven’t actually lost any money in the market, and these articles back up my thoughts on staying in. I’m in it for the long haul, the historical performance. That’s what keeps the market in business and folks making money.
There is a good side to the lower stock prices, they cost less to purchase. Think of down slides as “Sales Events.” You get more bang for your investment bucks.
So, what do you think of the market? As of today, Feb. 10, 2017, I’m pretty pleased where my portfolios are at.
How about you?
