What should you know?
The relentless rise of stock markets is matched only by the equally relentless flow of negative news events that often create stock market volatility.
The high frequency of these events, and the needless fear they create, are enough to deter some people from ever investing their money. They can also spur misguided investors to retract their investments for fear of a permanent loss of capital.
The chart below plots many of the big events that we have experienced over the past 30 years, alongside the relentless rise of the MSCI World index over the same period:
The period includes global events such as the collapse of the dot.com bubble, the global financial crisis and the Covid 19 pandemic, as well as numerous wars and natural disasters. None of these were able to derail the long term rise of global stock markets.
Why should you care?
Mark Twain once said, “I’ve had a lot of worries in my life, most of which never happened”.
If you look hard enough, you will always find a reason to be fearful to invest your money, or to interfere with your portfolio.
However, history shows that it is always a good time to invest if you are in it for the long term.
The risks of not investing your money, condemning it to slowly erode away from inflation, are far higher than the perceived risks of investing.
Adopting a positive mindset and overcoming your worries is a key ingredient to investment success. A quick look back at the past proves that, as long as you stick to the long term plan, any fears you have are unfounded.
