$1 (in 1870 U.S. dollars) invested in a hypothetical U.S. stock market index in 1871 would have grown to $18,500 by the end of June 2020. But it wasn’t a smooth ride to get there. There were many drops along the way, some of which were severe. - Paul D. Kaplan
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While both recessions and bear markets are unpleasant situations for investors, they are over relatively quickly. The thought of experiencing a “lost decade,” with no return on your investment, is far more concerning. For example, the U.S. had a lost decade from the year 2000 through 2009.
On the bright side - The market has always eventually rebounded and went on to new highs, but it may have been hard to believe this during some of the long-term bear markets.
"The stock market is but a mirror which provides an image of the underlying or fundamental economic situation. Cause and effect run from the economy to the stock market, never the reverse. In 1929 the economy was headed for trouble. Eventually that trouble was violently reflected in Wall Street.” — John Kenneth Galbraith
https://www.morningstar.com/features/wha...c056de.svg
While both recessions and bear markets are unpleasant situations for investors, they are over relatively quickly. The thought of experiencing a “lost decade,” with no return on your investment, is far more concerning. For example, the U.S. had a lost decade from the year 2000 through 2009.
On the bright side - The market has always eventually rebounded and went on to new highs, but it may have been hard to believe this during some of the long-term bear markets.
"The stock market is but a mirror which provides an image of the underlying or fundamental economic situation. Cause and effect run from the economy to the stock market, never the reverse. In 1929 the economy was headed for trouble. Eventually that trouble was violently reflected in Wall Street.” — John Kenneth Galbraith
