The Long-term Perspective
Earlier this week, the S&P 500 had the strongest two-day stretch since 2020, but that doesn’t mean this year’s market performance hasn’t been painful to watch. No one likes to see the value of their investments go down. Most investors have long-term goals but can get sidetracked when volatility strikes. As legendary money manager Peter Lynch, once said, “Far more money has been lost by investors trying to anticipate corrections, then lost in the corrections themselves.”
The chart below shows how a diversified portfolio responded to historical bull and bear markets between 2000-2020. While the diversified portfolio lost money during certain periods, it produced better overall returns in the long-run.
Remember: Emotions are short-term feelings, but they can cause us to lose our long-term perspective.
Source: Morningstar as of 12/31/21. *Performance is from 9/30/00 to 12/31/02. †Performance is from 1/1/20 to 3/23/20. ‡Performance is from 3/24/20 to 12/31/21. Diversified Portfolio is represented by 25% S&P 500 Index, 19% Russell Mid Cap Index, 7% MSCI EAFE Index, 5% Russell 2000 Index, 4% FTSE Emerging Stock Index, 25% Bloomberg US Aggregate Bond Index, and 15% Bloomberg US Corporate High Yield Index. Past performance does not guarantee or indicate future results. Index performance is for illustrative purposes only. You cannot invest directly in the index. Diversification does not guarantee a profit or protect against a loss in a declining market.
Investment Advisory services offered through Moonstone Asset Management, Inc. a registered investment adviser
Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.
This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.