Today Marks a Great Day in the Market.

TODAY MARKS A GREAT DAY IN THE MARKET.

The stock market is an interesting thing. It plays on our emotions in mysterious and illogical ways- ways that usually never make sense in hindsight. Today, while the markets continue to decline in 2022, actually marks a great day in so many ways.

First, the question you should ask yourself is why are you investing? Are you investing for retirement? For an expense 5 years away? 10 years away? What is your time horizon? If that is you, then I want you to take a look at the below charts and just consider what has actually happened since the pandemic took place in March of 2020.

The first chart is of the NASDAQ. TODAY, the NASDAQ is UP ~19% from its peak pre-Covid in February 2020 to today, May 11, 2022. In theory, our emotions would tell us that would be horrible timing, as the market went on to collapse, regain, and now is lowering seemingly everyday. In reality, through all of that, if you had invested in February of 2020, in just over 26 months your investment would be nearly 19% higher today in a fund mirroring the NASDAQ. If you invested at the bottom of the Covid decline, your NASDAQ investment would be 65% higher on May 11, 2022, about 25 months later!

How about the second chart- The S&P 500? From February of 2020 (again, the highs right before the pandemic bottoming) until today, the index has risen over 16%. From the bottom of Covid until today? The S&P 500 has risen over 70% in value.

And lastly, what about the famous Dow Jones Industrial Average? From February 2020 until today, May 11, 2022, the index has gone up 10% in value. From the lowest point during the pandemic until today, the index has risen 66%.

So why is today a great day? Because any investor who has held money in any of these three broad indices for at least 24 months has made money (and generally speaking, above average returns in a historical context). So many people seem to be panicking, as the markets have been on a major downward trend in 2022, but remember to ask yourself what your time horizon is? If it is anything less than 2 years, you are either a trader or not being prudent with your money. The majority of "regular" people are investors, and in it for the long haul. In it for retirement, or their daughter's wedding, or their child's college fund 10 years away. There have been two very large market selloffs in 26 months, and the market in that time is up, rather materially. What that should remind you of is that OVER TIME markets historically have only done one thing- go up and to the right. The stock market crashed in 2020, 2008, 2000, 1990, 1987, 1980, and 1973 to name a few, and recovered to a NEW ALL TIME HIGH EVERY SINGLE TIME.

Do yourself a favor, and avoid market timing. The market will do the work for you OVER TIME. #stockmarket #baltimorebusiness #financialeducation

-Your Friends at Red Oak Financial Group