By Ben Carlson
A Wealth of Common Sense

The best defense against significant losses in the stock market is a long enough time horizon.

Obviously, no one is good enough to put all of their money in at the bottom or unlucky enough to put all of their money in at the top on a consistent basis. But, it’s worth pointing out that the long-run in the stock market is pretty similar to what we’ve seen since 2007.

There are crashes, bear markets, and corrections on occasion.

There are periods of time when the stock market more or less goes nowhere.

And there are rip-roaring bull markets.

Shake it up, put it all together, and this is the experience you get when investing in the stock market over longer time frames.

The historical 9-10% annual return in the stock market isn’t simply made up of the good stuff. Those results include some pretty gnarly periods of volatility.

And one of the main reasons we get to experience bull markets like the one we are living through today is because there is always the chance of a crash like we experienced in 2008.

You don’t get the good without the bad.

You don’t get the gains without the losses.

You don’t get the reward without the risk.

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The commentary is the opinion of the author and distributed with permission under limited license. All data and charts presented herein are from sources deemed to be reliable but are not guaranteed to be accurate. The financial information presented is for information and educational purposes and is not a substitute for professional advice; use of or reliance on any information herein is solely at your own risk. Edited from the original.

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