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4 Certainties During Uncertain Times

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Have you ever had motion sickness before? You can get dizzy and nauseous and it’s not a very fun feeling.

You might say there is a level of uncertainty with motion sickness because you can get pretty disoriented. 

When you get motion sickness, experts say to focus on something that is sturdy like the horizon or by placing your hand on something sturdy. You can also focus on something that is stationary in whatever is moving with you.

I previously wrote about three ways you can manage your investments during uncertain times, and today is a continuation of that.

See, during uncertain times like these, it’s important to focus on things that are certain. 

If you are consistently focusing on what might happen or the uncertainty of the markets or the continued (but hopefully almost through?) covid pandemic, you will get very anxious.

Today, I want to give you four certainties that you can cling to in the current climate of major uncertainty. 

1. Markets Will Return to Normal

The first certainty that we have in these difficult times is that the market will return to normal. In fact, now is a great time to manage your investments well.

But what is normal?

Normal is the market continuing in an upward trajectory. There will always—I repeat, always—be downturns and correction in the market where things will look bad for a bit.

However, generally speaking, the market always goes up.

Courtesy of macrotrends, take a look at this chart of the historical yearly returns from 1999 to 2019 for the S&P 500 index.

Year Average Closing Price Year Open Year Close Annual % Change
2019 2,913.36 2,510.03 3,230.78 28.88%
2018 2,746.21 2,695.81 2,506.85 -6.24%
2017 2,449.08 2,257.83 2,673.61 19.42%
2016 2,094.65 2,012.66 2,238.83 9.54%
2015 2,061.07 2,058.20 2,043.94 -0.73%
2014 1,931.38 1,831.98 2,058.90 11.39%
2013 1,643.80 1,462.42 1,848.36 29.60%
2012 1,379.61 1,277.06 1,426.19 13.41%
2011 1,267.64 1,271.87 1,257.60 0.00%
2010 1,139.97 1,132.99 1,257.64 12.78%
2009 948.05 931.80 1,115.10 23.45%
2008 1,220.04 1,447.16 903.25 -38.49%
2007 1,477.18 1,416.60 1,468.36 3.53%
2006 1,310.46 1,268.80 1,418.30 13.62%
2005 1,207.23 1,202.08 1,248.29 3.00%
2004 1,130.65 1,108.48 1,211.92 8.99%
2003 965.23 909.03 1,111.92 26.38%
2002 993.93 1,154.67 879.82 -23.37%
2001 1,192.57 1,283.27 1,148.08 -13.04%
2000 1,427.22 1,455.22 1,320.28 -10.14%
1999 1,327.33 1,228.10 1,469.25 19.53%
Average yearly return 6.26%

As you can see from the data, there have been some up years and some down years, with the Great Recession causing almost a 40% drop in value. The up years outweigh the down years with a lot more green in the table than red. 

Averaging out all of the 21 years shown gets you an average yearly return of 6.26%. 

Putting that in round numbers, if you invested $10,000 in an index fund following the S&P 500, didn’t add or touch any of it, you’d have $35,790.36 at the end of those 21 years. Again, that is going through the Great Recession and other downturns like the one caused by 9/11.

That’s a good return on your investment! 

Even looking over the very long term, according to Investopedia the average annual return of the S&P 500 since its inception in 1957 through 2018 is about 8%.

According to the data, the market is always going to go up. Have no fear that your investments are safe.

2. Life Will Return to Normal

A term that was common at the start of the pandemic was “the new normal.” 

I don’t like that term. To me, saying something is “the new normal” is misleading and discouraging. It implies that things will always be the way they are right now.

Let me assure you that life will return to normal.

How do I know? Because history tells us it does. 

The pandemic isn’t even technically over yet and most of the media coverage is focused on high gas prices and the Russia/Ukraine War. COVID-19 isn’t top-of-mind anymore. In a couple of months, it’ll be something else.  

The optimist in me notices that events like what we’ve experienced the past couple of years have a tendency to make us reexamine what is important in our lives as well.

It is a certainty that life will return to normal and I’m optimistic it’ll be better than it was before.

Keep your chin up!

3. There Will Be Some Permanent Changes

Even though life will go back to normal, there will definitely be some permanent changes from all of this.

Think about this.

You can’t go to an airport without feeling the effects of the 9/11 attacks—and we’re coming up on the 19 year anniversary. 

The public doesn’t think about it 24/7 but there have been some good changes that protect us from similar attacks. 

The Great Recession is another example of permanent change. There are a lot more regulations on banks and lending that are designed to protect from a total market crash due to financial institutions. 

The same thing will happen with the covid pandemic and the war in Ukraine. Life will largely move on but permanent changes will be made so we are ready for something like these in the future. 

4. We Will Get Through This

If there is one thing that is certain, it’s that we will get through this.

We will move on from this pandemic. We will move on from all the fake news, real news, and real danger. I believe we will move on from the war in Ukraine right now.

America—and especially the American people—will not go down so easily. But we have to do this together. 

Together, we will come out stronger on the other side. I want to encourage you to love each other through everything going on.

Let go of any racism and help your fellow neighbors. Help the elderly. Keep each other safe. Put others before yourself. And stop any and all polarization from the political right or left.

That is how we’re going to be stronger and more connected after we’re done with the pandemic, war, inflation, and all these other issues we’re experiencing right now.

I encourage you to stand up and lead in love yourself. Be an example for others in the country. We will get through this. And we will be stronger together after we’re done.

Conclusion

Every time we go through something that threatens to destroy our way of life, we always come out on the other side. 

We examine, we grieve, and we change, but we always come out on top. I have no doubt that the United States—and you personally— will be all the better after this.

Keep your chin up. Stay encouraged. Have faith. And be grateful.

And let me know if you need anything. Atypical Finance is here for you.

God Bless.

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