Covid and a Reminder about Long Term Investing

Do you remember what you were doing 5 years ago?

I’d rather not recall that time, but it was the onset of the COVID-19 pandemic.

I like everyone across the world was wondering what was going to happen. I actually don’t recall a time that I watched or read as much news as in February and March of 2020.

This was the week that the COVID crash of 2020 began. Though the crash began on February 20th, selling was intensified during the first half of March to mid-March.

March 9th saw the Dow down 7.79%, March 12th it was down 9.99% and on March 16th it fell by 12.93%.

It wasn’t a fun time to relive. Everything including the stock market was a mess. So that’s enough reliving bad memories.

So what has the stock market done since those dark days in 2020?

February 19th was the peak for the S&P 500 before it fell by about 34% in a month. Since February 19th 2020 until today, the S&P 500 has gained 81%.

So if you had invested in the S&P 500 index on February 19th, right at the high before the pandemic crash and done nothing. You would be up by 81%.

Just look at what S&P 500 has done compared to other countries.

Source: John Authors via Mohamed El-Erian

I really like this chart that shows the importance of staying invested. Take a look at the differences in just missing out on a few days. It can prove very costly over the long-term.

The COVID-19 pandemic won’t be the last major world event. There have been many and there will likely be many more. Throughout all the events, the stock market has continued to move higher.

This is a great chart that shows all the crises and events going back to 1970. How many of these do you remember?

This one from Ryan Detrick zooms out a little father. It goes back to 1900.

Surprising and unfortunate events do happen. A constant through them all has been that the stock market continues to climb higher. It takes some hits and falls, but it overcomes. Remember that lesson during the next event that causes a market crash like the COVID-19 pandemic did.

Stay invested. No matter what’s going on in the world, stay invested.

Original article was written by Eric Soda

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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