There has Always Been Something to Worry About
Inflation, rising interest rates, war, government spending, mid-term elections, supply chain disruptions, an aging population, labor shortages and a pandemic. These all make for sensational headlines, reasons to worry and are the subject of many conversations. Interestingly enough though, there have always been reasons to worry, including worrying about our money.
A quick look back at history reminds us of what we’ve gotten through as a country and financially. Two World Wars, a great depression, and an attack on American soil in 1941 with the bombing of Pearl Harbor. Consumer goods shortages in 1944, the beginning of the Cold War in 1947, the Soviets detonating an atomic bomb in 1949, and the Korean War in 1950. The Soviets detonated an H-bomb in 1953, Castro seized power in Cuba in 1959, and the Berlin Wall was erected in 1961. The Cuban missile crisis happened in 1962 and President Kennedy was assassinated in 1963. It must have been rather stressful to live through the late 1960’s with the Vietnam War and in the 1970’s we dealt with Watergate, an oil embargo, an energy crisis and the Three Mile Island nuclear accident. Inflation ran rampant in the late 1970s and early 1980s, and in 1981, both President Reagan and the Pope were shot. The late 1980’s brought the Savings and Loan crisis as well as Black Monday on October 19, 1987 when the stock market fell by 20% in a single day. The fed raised interest rates six times in 1994, and the end of the 90’s brought the crash of technology stocks, fears of Y2K and the 9/11 terrorist attacks. The subprime mortgage market melted down, leading to the great recession in 2008. Unemployment hit 10% in 2009 and we faced a “Fiscal Cliff” and downgrade of US debt in 2012. The 20-teens brought hurricanes, trade wars, and then, the beginning of a pandemic. We got through all of it.
I could tell you what a few dollars invested in the stock market would have turned into going all the way back to the beginning of worry, but most of us don’t have that kind of time horizon. An interesting 10 year segment is 1968-1978, when the S&P 500 began at 96.47 and ended right back where it started, at 96.11, the epitome of a flat decade. That may lead one to worry that investing during those ten years would have gotten them nowhere. However, had one invested $10,000 in stocks to mirror the S&P 500 during that time frame and reinvested their dividends, their ten grand would have grown to $15,174.(1)
A disciplined investment strategy includes remembering that when headlines sizzle and markets gyrate, we recall that there has always been something to worry about.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.