Video: Stay the Course in Volatile Times

by | Dec 7, 2020 | Home, Videos

How much money would you have today if you invested 10,000 in DOW Jones Industrial Average in 1900 and didn’t touch it? Watch to find out the answer and why you should stay the course with your investments during volatile times.

Full transcription:

“We survived the 2020 election. Now what?”

That’s a question we’ve been hearing quite a bit lately, and of course, we’re not sure we’ve even survived it yet with a lot still out there. We think that staying the course during challenging times makes the most sense. You don’t want to make decisions based upon whether the president that you wanted in office was elected or not.

Ryan recently came across some really interesting information from Liz Ann Sonders, one of the Chief Investment Officers for Charles Schwab. She shared about what would’ve happened if you had invested $10,000 in 1900 and what it’d be worth today with a few different approaches.

What a $10,000 investment would do over time: 3 approaches

If you went back 120 years ago, and if you were a Republican and you only invested during times when a Republican was holding presidential office, that $10,000 would be worth $99,000. If you were a Democrat doing the same with Democrats in office, it’d be worth $430,000. So a little bit more with the Democrats in office approach. But if you kept that entire $10,000 invested in the DOW Jones Industrial Average that entire 120 years, your investment would be worth $4.2 million. $4.2 million is a heck of a lot more than $99,000 and $430,000. So if you ever thought that “Because the president that I wanted in office did not get elected, I should go to all cash” the answer is “No”. We don’t have great answers for people not getting their president elected and not wanting to be invested in the market. History, science and math really don’t tell us that. But, based on what we know, we think markets see green alot more than they see red or blue.

Investment advice in volatile times

Stay the course. Be persistent and disciplined with a specific investment approach. Manage your investment risk score. This makes the most sense whether your president got elected or not.

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