Ever Advancing, but not in a Straight Line

As we have mentioned many times over the years, in order to earn stock market returns, one has to endure the inevitable downdrafts of one's stock portfolio. However, short term volatility has always yielded to handsome long term stock market returns. We have every reason to believe this will persist in the future. To illustrate this concept, please see the Dimensional Quick-Take below.

Stuart McGehee

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Stocks Have Rewarded Investors over the Long Term

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For additional context, we at Pacific Northwest Asset Management, LLC consider the following events:

Throughout history, stock markets have consistently delivered growth, creating substantial wealth for investors. Despite facing numerous challenges, the overall trajectory of stock markets has been upward.

Resilience in the Face of Adversity

Financial markets have shown remarkable resilience during significant events, including:

• The 1929 Stock Market Crash: This event marked the beginning of the Great Depression, yet markets eventually recovered, leading to significant growth in subsequent decades.

• World War II: Despite the global turmoil and economic disruptions, markets rebounded post-war, fueled by industrial growth and consumer demand.

• The 2008 Global Financial Crisis: Following this severe downturn, markets recovered and reached new heights, demonstrating the power of long-term investment strategies.

• The COVID-19 Pandemic: While initially causing significant market volatility, the recovery was swift, showcasing the adaptability of economies and markets.

Compounding Returns

Long-term investing has delivered the benefits of compounding returns. As stock investments have appreciated, the returns generated have lead to attractive growth over time. We believe the potential for this trend to persist is high, especially given the innovative and well managed companies here in the U.S. and abroad.

Mitigation of Market Volatility

Investing for the long term usually helps mitigate the effects of short-term market volatility. By staying invested through market fluctuations, investors can avoid the pitfalls of trying to time the market, something few on Wall Street have done successfully or consistently.

Building Evergreen Wealth Over Time

Long-term investing is a strategy that has historically proven to build wealth. By remaining committed to investments and allowing them to grow, individuals have the potential to achieve significant financial goals, such as a comfortable retirement and wealth accumulation.

The historical performance of stock markets illustrates the importance of long-term investing. By understanding the resilience of markets and the benefits of compounding, investors can make informed decisions that potentially lead to substantial wealth creation over time. While there is no guarantee that historical market returns of a diversified portfolio of stocks and bonds will persist, we have confidence it will.

DISCLOSURE: Pacific Northwest Asset Management, LLC (hereinafter “PNW Asset Management”) is an investment adviser registered with Washington State. PNW Asset Management may not transact business in states where it is not appropriately registered, excluded or exempt from registration. Individualized responses to persons that involve either the effecting of transactions in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.