We at Kramer Wealth Managers want to provide some brief comments about the stock market and the volatility we have seen lately. Yes, we know it has declined quite a bit recently. We want to remind everyone that stock market volatility is normal. During these times, people often wonder if they should take their money out of the market or just leave it alone. It causes a lot of uncertainty. I want to share with you some data from JP Morgan Private Bank research.
Throughout history, from 1999 to now, there have been many times when media hype has given investors reasons for why they feel they should not invest money. Or why they should pull out of the market. If an investor had actually followed the media hype and pulled out of the market at that time, let’s look what difference would it have made?
Let’s look at some examples:
- 1999: Y2K- Investing in the S&P 500 would have had a 467.1% return
- 2001: 9/11- Investing in the S&P 500 would have had a 415.4% return
- 2002: Dot Com Bubble Burst- Investing in the S&P 500 would have had a 484.9% return
- 2008: Global Financial Crisis- Investing in the S&P 500 would have had a 310.6% return
- 2012: Greek Bailout and Euro crisis- Investing in the S&P 500 would have had a 338.6% return
- 2020: COVID-19 Pandemic- Investing in the S&P 500 would have had a 44.54% return
These are just a few of many examples. It is normal for people to react to and be concerned with all of the media hype and attention. But history shows that the market has always rebounded from these types of events. Of course, rebounds are never guaranteed and past performance is no indication of future results. Still, it’s good to have this historical context as you make decisions about your own investments and decide whether or not to buy into the media hype. If you want to discuss further, please feel free to contact your KWM advisor.