Two Steps Forward, One Step Back for Investors
April 3, 2023 Author: David Booth, Chairman and Founder
David Booth, Chairman, and Founder discusses the recent years' financial turmoil and uncertain conditions in his article Two Steps Forward, One Step Back for Investors. The author asks investors to imagine predicting market returns three years ago and how they would have fared given the various ups and downs. However, the article explains how even with the global pandemic, rapid inflation, the war in Europe, and volatile markets, the S&P 500 index still grew by almost 25% from 2020 to 2022. The article then provides a historical analysis of the distribution of annual returns over 97 years, with most of the returns between -10% and +40%. Furthermore, it argues that the past three years' returns were "normal" compared to previous years in terms of equity returns. The article emphasizes the importance of being a long-term investor with an investment plan one can stick with, and investors should not make sudden adjustments to their portfolio based on short-term market fluctuations. Click the link below to read the full article.