The Crisis of the Day

Focusing on the Long-Term

By Michael Foster, CFA, CFP®

The last few years in capital markets have been interesting to say the least. Since the start of 2020, investors have dealt with the implications of COVID-19, crypto/NFT booms and busts, supply chain disruptions, political shifts, meme stocks, inflation, war and global conflict, recession fears, and bank failures, just to name a few of the concerns on the minds of many.

Getting caught up in the never-ending cycle of disturbing news and “doomscrolling” can be hard to avoid. However, long-term investors should be comforted that markets have weathered countless unprecedented events in the past and rewarded investors for sticking out the tough times. The chart below is one of my favorites that we often share with current and prospective clients.  

Source: Dimensional Fund Advisors

It shows how a dollar placed in a globally diversified stock index has performed since 1970 with many major world events listed. You can see that global markets have withstood numerous extreme events. Many of these events cause downturns (the line isn’t always neatly upwardly sloping), but those downturns are dwarfed by the positive return periods. This isn’t to say that you personally shouldn’t have concerns over what’s going on in the world, but that incorporating those personal concerns into your investing choices isn’t a recipe for success.  

From the beginning of 2020 through the end of April 2023, the same index in the chart (MSCI World Index net dividends) has returned 7.36% on an annualized basis. Markets continue to reward discipline through uncertainty.  

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The market and economic data are historical and are no guarantee of future results. All indices are unmanaged and may not be invested into directly. The information in this report has been prepared from data believed to be reliable, but no representation is being made as to its accuracy and completeness.

Nothing in this material should be construed as investment advice offered by Dolan Capital Advisors, Inc. This market commentary is for informational purposes only and is not meant to constitute a recommendation of any particular investment, security, portfolio of securities, transaction, or investment strategy. No chart, graph, or other figure provided should be used to determine which securities to buy, sell or hold. No representation is made concerning the appropriateness of any particular investment, security, portfolio of securities, transaction, or investment strategy. You should speak with your own financial professional before making any investment decisions.

Past performance is not indicative of future results. Dolan Capital Advisors, Inc. does not guarantee any specific outcome or profit. These disclosures cannot and do not list every conceivable factor that may affect the results of any investment or investment strategy. Risks will arise, and an investor must be willing and able to accept those risks, including the loss of principal.

Certain statements contained herein are statements of future expectations and other forward-looking statements that are based on opinions and assumptions that involve known and unknown risks and uncertainties that would cause actual results, performance, or events to differ materially from those expressed or implied in such statements.

Ben Dolan and Michael Foster are investment advisor representatives of Dolan Capital Advisors, Inc., a SEC-registered investment adviser. Investment advice offered through Dolan Capital Advisors, Inc.