Ouch, what a quarter! Mr. Market really dished out a painful kick to the teeth of investors in Q2 2022.
Investors’ resolve might have been rattled, and emotionally driven investors might be tempted to exit the markets entirely, now that we have entered a bear market and could potentially go into a recession. Nevertheless, even full-blow recessions are no reason to not stay invested, as the following picture of the past recessions going back to 1926 clearly shows (recessions are shaded in green):
Despite all the nerve-racking equity losses during past recessions, capital markets have always rewarded long-term investors. The picture shows a hypothetical $100 dollars invested in US equity markets in 1926 and how it has grown to $1,000,000 over the past 95 years, providing long-term investors with solid equity returns (note the logarithmic y-axis).
For a more detailed look at the performance in Q2 2022, please click HERE or click the picture below.