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Worried About Stocks? Why Long-Term Investing is Crucial

We are living in a time of extreme uncertainty and the anxiety that comes along with it. Against the backdrop of war, humanitarian crisis, and economic hardship, it's natural to wonder what effect these world events will have on our long-term investment performance.

While these challenges certainly warrant our attention and deep concern, they don't have to be a reason to panic about markets when you're focused on long-term investing.

Imagine it's 25 years ago, 1997:

  • J.K. Rowling just published the first Harry Potter book.
  • General Motors is releasing the EV1, an electric car with a range of 60 miles.
  • The internet is in its infancy, Y2K looms, and everyone is worried about the Russian financial crisis.

A stranger offers to tell you what's going to happen over the course of the next 25 years. Here's the big question: Would you invest in the stock market knowing the following events were going to happen? And could you stay invested?

    • Asian contagion
    • Russian default
    • Tech collapse
    • 9/11
    • Stocks' "lost decade"
    • Great Recession
    • Global pandemic
    • Second Russian default

With everything I just mentioned, what would you have done? Gotten into the market? Gotten out? Increased your equity holdings? Decreased them?

Well, let's look at what happened.

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