{"id":12460,"date":"2023-08-17T10:49:31","date_gmt":"2023-08-17T10:49:31","guid":{"rendered":"https:\/\/isafespend.com\/personal-finance\/wealth\/failing-to-learn-from-history-can-be-detrimental-to-your-investments-and-your-retirement\/"},"modified":"2023-08-17T10:49:32","modified_gmt":"2023-08-17T10:49:32","slug":"failing-to-learn-from-history-can-be-detrimental-to-your-investments-and-your-retirement","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=12460","title":{"rendered":"Failing To Learn From History Can Be Detrimental To Your Investments, And Your Retirement"},"content":{"rendered":"
\n

Winston Churchill once said, \u201cThose that fail to learn from history are doomed to repeat it,\u201d and it holds true \u2013 particularly when it comes to investments. Historical investment data can be complex to decipher, but this chart from Capital Group does an excellent job at illustrating the relationship between market downturns and recoveries:<\/p>\n

Takeaways From Historical Data<\/h2>\n

What can we learn from historical investment data?<\/p>\n

First \u2013 we can\u2019t time the market. Looking at a chart like the above from Capital Group, deciding when to hop in or out and trying to time your investments isn\u2019t a bright idea.<\/p>\n

<\/fbs-ad><\/p>\n

We can also learn that the upside tends to be more promising than the downside. While downturns are an inevitable part of the market cycle, we also experience more market recoveries in general than we do downturns. Because the stock market is based upon the corporate world, we can have hope that the market won\u2019t likely go to zero as it would leave the corporate world valueless \u2013 it\u2019s just a highly unlikely scenario. On the flip side, the positive return is theoretically limitless and on average is 2.5 times over 100%, which just isn\u2019t feasible on the downside.<\/p>\n

While you can\u2019t time the market, timing can cloud your judgment. If you start investing during a down period, it can feel like you\u2019re stuck in a bad place \u2013 whereas if you had started during an upswing and you\u2019re still on the way up, things would feel good. It\u2019s important to remember that the market naturally goes up and down, and that investing is a long-term experience that you can\u2019t look at during a few week period on it\u2019s own. Downturns are a normal part of the process, and they will continue to happen \u2013 but so will recovery.<\/p>\n

What Makes A Difference<\/h2>\n

When it comes to history, and your investments, Winston Churchill has another quote that you may want to keep in mind, \u201cAttitude is a little thing that makes a big difference.\u201d When you\u2019re facing a down market year and feel like it won\u2019t ever turn around, or your investments are worth less than they were in months before, keep in mind that your attitude will make a big different and that investing is a long term process \u2013 and that in general, there\u2019s more upside than downside.<\/p>\n<\/div>\n

\n

Disclosure: Diversified, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. A copy of Diversified\u2019s current written disclosure brochure which discusses, among other things, the firm\u2019s business practices, services and fees, is available through the SEC\u2019s website at:\u00a0<\/em>www.adviserinfo.sec.gov<\/em>.\u00a0Investments in securities involve risk, including the possible loss of principal. The information on this\u00a0website is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.<\/em><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Winston Churchill once said, \u201cThose that fail to learn from history are doomed to repeat it,\u201d and it holds true \u2013 particularly when it comes to investments. Historical investment data can be complex to decipher, but this chart from Capital Group does an excellent job at illustrating the relationship between market downturns and recoveries: Takeaways<\/p>\n","protected":false},"author":1,"featured_media":12461,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57],"tags":[],"class_list":{"0":"post-12460","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-wealth"},"yoast_head":"\nFailing To Learn From History Can Be Detrimental To Your Investments, And Your Retirement | iSafeSpend<\/title>\n<meta name=\"description\" content=\"Winston Churchill once said, \u201cThose that fail to learn from history are doomed to repeat it,\u201d and it holds true \u2013 particularly when it comes to\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" 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