I’ve been in this business for well over 50 years and have seen my fair share of challenging markets. Those experiences have been top of mind lately as I’ve looked back on the decade since the start of the financial crisis.
Crashes are always hard to stomach, but I’ve learned to take heart from the fact that they don’t last forever. Historically, even the most bearish of markets have eventually turned into bulls.
The 2008 crisis is a case in point. U.S. stocks fell more than 40% in a matter of months, and for many it felt like the bottom would never arrive. But of course, it did. Indeed, had an investor in the S&P 500® Index simply held fast, her or his portfolio would have regained all that lost ground in around three years.
And look where we are now: Between the start of the crisis and early September 2018, the S&P 500 delivered a cumulative return of roughly 130%.1
Every market cycle is unique, but the abiding lesson I’ve learned from each is this: Focusing on the long term—and staying invested even when markets get rough—is almost invariably the right course of action.
Charles R. Schwab
Founder & Chairman
1Schwab Center for Financial Research and Bloomberg. Data from 09/12/2008 to 09/07/2018.