Keeping a Long Term Perspective

Michael Sebastian, Chief Investment Officer

Many investors are looking at major market performance so far in 2022 with some unease. The pandemic, supply chain issues, a tight labor market, spiking inflation, anticipation of interest rate hikes, and now the situation in Ukraine have driven market volatility, prompting concerns about what comes next.

While short-term market movements can be challenging to predict, historical evidence points to two things for long-term investors to keep in mind:​

• Stocks (the driver of growth in portfolios) have produced positive returns, in excess of bonds (the risk-reducer in portfolios), over long enough time horizons. Historically, stocks earned a positive return over five-year periods 90% of the time, and have always recovered from even the worst downturns, such as the 1973-74 crash and the 2008 Global Financial Crisis, in at most six years.

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