Invest with Your Eyes Wide Open

Are you prepared for volatility? Before you make an investment, look carefully at its track record by asking these five questions.

(Image credit: LUCY LAMBRIEX)

Many investors are convinced that their investment portfolios should always go up. When returns don’t meet these unrealistic expectations, they tend to throw in the towel. It’s a mistake to sell good investments just because they are having a sluggish year or struggling through a bear market. You need to invest with your eyes wide open, knowing beforehandwhat to expect from your investments in both bull and bear markets. In most cases, when your investments take near-term dips, or fluctuate with the market, you should stay invested and hold on.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%
https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up
Swipe to scroll horizontally
1970-2016
Asset ClassAnnual Rate of ReturnWorst Year
Large-Company U.S. Stocks10%-37%
Small-Company U.S. Stocks12%-38%
International Stocks9%-43%
Long-Term Corporate Bonds9%-7%
Long-Term Government Bonds9%-12%
U.S. Treasury Bills5%0.03%
Swipe to scroll horizontally
S&P 500 Index
Market DownturnRow 0 - Cell 1 Total MonthsTotal ReturnS&P 500Total ReturnOne Year Later
BeginEndRow 1 - Cell 2 Row 1 - Cell 3 Row 1 - Cell 4
Jun 15 '48Jun 13 '4912.1-20.6%42.1%
Aug 2 '56Oct 22 '5714.9-21.5%31.0%
Dec 12 '61Jun 25 '626.5-27.8%32.3%
Feb 9 '66Oct 7 '668-22.2%33.2%
Nov 29 '68May 26 '7018.1-36.1%43.7%
Jan 11 '73Oct 3 '7421-48.2%38.0%
Nov 28 '80Aug 12 '8220.7-27.1%58.3%
Aug 25 '87Dec 4 '873.4-33.5%22.8%
Mar 24 '00Sep 21 '0118.2-36.8%-13.7%
Jan 4 '02Oct 9 '029.3-33.8%33.7%
Oct 9 '07Nov 20 '0813.6-51.9%45.0%
Jan 6 '09Mar 9 '092.1-27.6%68.6%
AverageRow 14 - Cell 1 12-32.3%36.2%
Swipe to scroll horizontally
Dow Jones Industrial Average (DJIA)Header Cell - Column 1 Header Cell - Column 2 Header Cell - Column 3 Header Cell - Column 4
WarBeginEndTotal MonthsChange in DJIA
World War lApr '17Nov '1820-19%
World War llDec '41Aug '454541%
Korean WarJun '50Jul '533720%
Vietnam WarAug '64Jan '7310221%
Gulf WarJan '91Feb '91215%
Iraq WarMar '03Dec '1110543%
AverageRow 7 - Cell 1 Row 7 - Cell 2 5220%
Swipe to scroll horizontally
S&P 500 Index
Attacks of September 11, 2001Days after AttackTotal Return S&P 500
Initial Market ReactionSeptember 17, 20017-4.9%
Market Bottom after AttackSeptember 21, 200111-11.6%
One Month after AttackOctober 11, 2001300.4%
Two Months after AttackNovember 10, 2001602.5%
Three Months after AttackDecember 10, 2001904.3%
Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To continue reading this article
please register for free

This is different from signing in to your print subscription


Why am I seeing this? Find out more here

Ray E. LeVitre, CFP®
Founder, Managing Partner, Net Worth Advisory Group

Ray LeVitre is an independent fee-only Certified Financial Adviser with over 20 years of financial services experience. In addition he is the founder of Net Worth Advisory Group and the author of "20 Retirement Decisions You Need to Make Right Now."