History Shows That It Pays to Stay Seated
Mark Twain once said — History never repeats itself, but it does often rhyme. When it comes to investing, we shouldn’t automatically assume what has happened before, will happen again; however, we can look to history as a guide on what to expect.
With 2022 having recorded a double-digit loss for investors, what should we expect for 2023 and beyond?
Data shows us that global equity returns have on average, been positive following market declines:
On average, when global stocks suffer losses in a given year, recovery follows swiftly in the following year.
Staying seated following a market decline has reaped rewards; with average five-year returns of 49.7% to 67.1%.
Making changes to your investments after the market has declined can lead to missing out on gains during the recovery — this in turn delays the recovery of your capital, or in the worst case, permanently impairs it.
Market declines can be unsettling. However, having an investment plan that takes into consideration the real possibility of losses and preparing for it will help you stay seated during periods of turbulence.
Do you have these kind of questions floating about in your head?
How will my investments perform in 2023?
What is an investment plan?
A recession is supposed to hit in 2023. Is it better to sell and go to cash?
In the same way that you would not attempt a high risk activity such as sky-diving without professional supervision, you can benefit greatly by relying on an adviser, essentially an independent third party coach — to guide you and provide the peace of mind knowing that your plan is in the hands of a professional.
If you would like to receive a complimentary second opinion on your investments, finances and have questions on what to do during this period, click here to schedule a 30-minute session with us.