Ever forget what you ate for dinner but remember exactly where you were when hearing about the 9/11 terrorist attacks?
I was on a train heading to work during my first year in tech consulting. When I got the call about it, I couldn’t believe it until I grabbed a newspaper at Town Hall station.
Back then, the U.S. stock market was already shaky due to the dot-com bubble burst. 9/11 only made things worse, leading to job cuts, especially in tech. The following two years were a rollercoaster; the S&P 500 hit rock bottom at 776 points in October 2002.
But here’s the incredible part: Despite the dot-com bust, 9/11, the 2008 financial crisis, COVID-19, and even recent inflation scares, the S&P 500 is now around 4,457 points! That’s a whopping 474% increase, averaging roughly 10% p.a. over the last 21 years—and that’s not even including dividends!
So what’s the takeaway? The world is uncertain. Things can and do go wrong. But adopting a long-term investing approach can be your shield against these uncertainties. Not only do you harness the power of compound returns, but you also give yourself the gift of less stress and more confidence.