A Bad Start, But We’ve Been Here—And Worse—Before

There’s something familiar about all this…haven’t we been here before? Wait a minute….all these things are familiar—the war, the inflation, the economy, the politics, the societal unrest….

Indeed, we have been here, four decades ago, for example. In fact, Sheaff Brock Managing Director Dave Gilreath was there, 40 years ago. And, after more than forty years in the business of investment management, he’s decided it’s all about perspective.

40 years ago? Double digit inflation.40 years ago? Interest rates in the teens. 40 years ago? High murder rates (actually double what we’re seeing today). Life expectancy 40 years ago?  Far shorter than today. Poverty 40 years ago? Much more widespread than today.

At least so far, Gilreath concedes, 2022 has been one big bust for stock and bond investors. Still, he reminds readers, successful long-term investors know there are always going to be “valleys” in the market, just as there will always be “peaks.” Pessimists focus on current problems, forgetting that those problems have always been with us. Their error in thinking—tragically underestimating the power of the U.S. economic engine to keep pushing profits higher in the long term.

While there are thousands more stocks trading on U.S. stock exchanges, the S&P 500 comprises about 80% of the entire stock market value on its own, making it a useful proxy for the performance of the stock market as a whole, the Motley Fool explains.

No, past performance does not guarantee, nor has it ever guaranteed future results. Still, history is a powerful tutor, and Dave Gilreath, having been along for the ride as the S&P doubled no fewer than five times, continues to be a believer in the positive power of the American economic engine.