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So, what have we learned from these recent crashes?
- It’s impossible to predict how long a stock market recovery will take.
- If you don’t panic and sell your stock holdings when the market crashes, you will be rewarded in the long run. //
When you incorporate the effect of inflation, one dollar (in 1870 US dollars) invested in a hypothetical US stock market index in 1871 would have grown to $30,711 by the end of February 2025.
The substantial growth of that $1 highlights the enormous benefits of staying invested for the long term.
Still, it was far from a steady increase over that period. There were 19 market crashes along the way, with varying levels of severity. //
What does this history tell us about navigating volatile markets? Mainly, that they’re worth navigating.