Between COVID-19, geopolitical conflicts, and a 40-year high in inflation, a common reaction to the resulting market volatility is to question the merits of investing. However, it's important to remember that, historically, the market has recovered from every hardship it's faced.
After the global financial crisis of 2008–2009, for example—during which the S&P 500 Index lost roughly half its value—the market not only recovered but also went on to the longest bull run in history, with the S&P 500 returning a staggering 306% between March 2009 and March 2020.
And a look back at 20 major geopolitical events since World War II—including the Cuban Missile Crisis, the 9/11 terrorist attacks, and the Iraq War—reveals that the market took an average of just 47 trading days to rebound from any associated losses.1 Every period of uncertainty is unique, of course, but the long-term trend has always been up.
Even so, we understand that uncertainty is its own market force—which is why we aim to counter all the noise with our measured, actionable guidance. As always, our goal is to help you look past the vagaries of today in order to own your tomorrow.
Charles R. Schwab
Founder & Chairman
1"How Stocks Do During Geopolitical Events", LPL Financial Research, 01/08/2020, https://lplresearch.com/2020/01/08/how-stocks-do-during-geopolitical-events/.