With current events shaping market behaviour, a couple of charts and a few words should help put things into perspective.
By John Leroux
Illustration 1
Illustration 1, a graph by Brouwer and Janachowshi published in 2021, illustrates that there are no shortages of negative events that historically caused the S&P to experience volatility. Each evidently having a momentary palpable negative eƯect at that specific moment in time. All to be forgotten as markets turned the corner.
More specifically, if the bears and bulls are specifically isolated, it is visually (illustration 2 – graph from Russell Investments), and mathematically (illustration 3 – MFS Investments) obvious that positive returns more than outweigh the negative drawdowns.
Illustration 2
So let’s look at the numbers over time:
Illustration 3
In conclusion, although we are living through an abnormal event, all caused by shocks external to the stock market(s), we need to keep in mind that this will eventually be another one of those forgotten events.
Patience will be the redeemer.
The comments contained herein are a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. This communication was written by John Leroux, Mutual Fund Representative with Investia Financial Services Inc., and does not necessarily reflect the opinion of Investia Financial Services Inc. The information contained in this communication comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any securities. Mutual Funds are offered through Investia Financial Services Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the Fund Fact sheet or prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.
Image source: Freepik
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