The inverted casino: What looking at a historical chart of the stock market can tell investors
Sometimes it’s helpful to take a step back and look at the big picture, and that is probably more true with investing than with many other aspects of our lives. The “little” picture is what happened yesterday, or last week, or the first or second quarters of the year. The big picture is something quite remarkable: the long-term trajectory of stock prices, which are the result of millions of people coming to work every day to add value, incrementally, day by day, to their companies.
So what is a historical stock market chart?
The chart shown here does two important things:
- It gives you the big picture of returns since the 1920s (the result of all that labor).
- It also shows, in the gray vertical bars, how few downturns we have experienced compared with times when the markets were rising.
Investing in the U.S. stock market is like putting money down in a casino where the odds of winning, over time, greatly exceed the potential for losses.
Are you still not sure why it’s important?
Focusing on the “little” picture is natural and normal — and also tends to lead to making decisions that are not ideal in the long run. If you walk into a casino where the odds are in your favor, a short run of bad luck shouldn’t discourage you from continuing to play.
Talk to a ProVise CFP® professional about historical stock market charts today
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about historical stock market charts? Contact ProVise today to schedule a complimentary consultation.