Forget the noise

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Have you ever looked into investing and just felt like it’s overly complicated and impossible to get into? Well, what you are seeing is noise, the fluff. You’re looking at the bad paint job and not seeing the strong foundation that will last centuries. Stop listening to noise of the market and look at the foundation.

I want to show you something.

The S&P500 1950-1990

Looks like it’s going to crash any moment right? Well good, it did. 10 Years later that is.

S&P500 1950-2010

That red arrow is where the last chart stopped. That huge growth from chart 1 looks puny compared to chart 2 right? Let’s keep going.

S&P500 1950-Today (2020)

So what’s the point? Well, point #1 is that when you look at a graph the market, it always looks like it’s ready to drop, and it does. But in the grand scheme of things, it doesn’t actually amount to much. This is especially true for longer-term investors.

Now, another point is that the daily activity of the market is of no importance. You’ll hear the news rant on about the market crashing and how you should sell before it falls and a bunch of absolute nonsense.

Do you know what happened in 1987? The biggest single-day crash of the stock market (in terms of a percent) in history. When it happened everyone thought the whole world was ending. They called it “Black Monday.” People sold at the bottom and lost money. Can you even tell where it is on the chart anymore? If you look at the 1st chart it may be a bit easier. Towards the right side where the scary red line does way down. Now go to the 3rd chart and look for it.

When we are talking about decades of exponential growth, single day drops are nothing, and yet back then people were literally jumping out of windows because of the chaos.

Let’s zoom in for some context.

S&P500 Feb 1980 – Nov 1987

Looks pretty bleak right? This is what they saw at the bottom. They had no idea the years of massive growth that would follow. Now, look at the chart above it. It barely even registers. On an old enough monitor, you might not even have the pixel count to see it.

Stop listening to all of the news, it’s not complicated. If you started investing at ANY POINT before 2018, that money is still worth more right now than it was when you put into it. That is if you’re investing in broad-based ETFs like VTI that is, look more into that here. Don’t look at dips, peaks, none of it. All of that is temporary noise that will look like the crash of 1987. Looking at the big picture though, investing long term brings back HUGE results, practically foolproof.

Thanks for reading and I hope this helps you look past all of the noise of investing.

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