An important part of our role at Stewart Group is to give our clients the confidence that it is sensible and prudent to remain disciplined when stock markets are volatile. We think this video will hopefully add to that confidence.
Since 1939, there have been 16 market falls, including this 2020 edition. That equates to, on average, one 20% fall every 5 years. We would thus describe this current volatility as uncomfortable but normal. Whilst the catalyst for each market episode differed, there is no “new normal” about market volatility.
Market falls never get any easier to deal with. How they affect our portfolios will be determined by the assets that make up our portfolios. As the media focus remains primarily on share market movements, it’s important to remember recoveries do happen.
Whilst the timeline for recovery differs for each market fall, ranging from a few months to a few years, the one common feature is the stock market did recover in every instance. There is no reason to expect anything different in 2020.
Watch this short video…
Throughout history, market falls have usually been accompanied by a subsequent recovery. If you are a long term investor it’s important to remain in your seat for the journey.
Note all data is in USD based on the S&P 500 Index. Charts show movements on a monthly basis. Falls shown as a percentage are peak to trough falls.
