No pain, no gain

The last few weeks have been rough, especially the last few days, for the stock market. Several things have caused the recent unrest: a major slowdown in China, unconfirmed rumors about a hydrogen bomb in Korea, and the Saudi/Iran conflict are at the forefront.  Regarding China, it’s important to note that 12% of our economy is based on exports, of which China receives 7%, so (doing the math), exports to China make up less than 1% of our economy!

Regardless, there have been a lot of events over the last few decades that have influenced the markets negatively, namely:


Black Monday


Gulf War


Asian Financial Crisis


Dot Com Crash


September 11th Attacks


Global Financial Crisis/Great Recession


Greek Financial Crisis


China Stock Market Crash

Despite all of this, stocks have done well over the time frame, with average annual returns of 8.25% over the last 30 years, through today.  And that doesn’t even account for diversification and rebalancing! Knowing this, the market volatility should only be scary if you are making short-term trades where shifts in the wrong direction are costing you realized losses. Otherwise, sticking to your long-term investment objective and finding opportunity in the chaos is the best way to minimize your own personal risk and maximize your expected return; this is exactly what I do for my clients.

%d bloggers like this: