Why You Should Keep a Long-Term Perspective
- Bottom line of graph is a Savings Account (basically flat)
- The next line above is 100 % Bonds/Fixed income
- The next line above is an allocation of 60% Stocks/Equity and 40% Bonds/Fixed income
- The top line is 100% Equity/Stocks
•Notice the S&P 500 does not always go up every year.
For this data the S&P 500 was positive 36 years and negative for 9 years.
Short term perspective/money is not for the stock market as it is too risky, look at years 2001 – 2003. If you needed your money to increase in value to be used in 2004 then you would have actually lost money as the market declined 3 years in a row.