The Issues that worry investors aren't new


Staying focused despite the day-to-day distractions of the market is never easy, especially during periods of economic uncertainty. However, investors who seek the guidance of a trusted Financial Professional and remain committed to their investment plans, even when it’s tempting to head to the sidelines, are better positioned to realize their short- and long-term goals.

For every bear, there’s a bull … and for every bull, there’s a bear. 

The chart below shows how dramatically the stock market (as represented by the S&P 500) bounced back from its lowest point during four bear markets over the last few decades. Of course, investors during these periods couldn’t possibly have known their investment would grow so dramatically … but they could have remained fully invested, condent in the knowledge that markets recover over time.

 

Cumulative total returns of the S&P 500 (%)


Sources: Standard & Poor’s, a division of the McGraw-Hill Companies, Inc.; GPW (Legg Mason internal system); and Morningstar Direct.

Past performance is no guarantee of future results. This chart is for illustrative purposes only and is not indicative of performance of any specific investment. All investments involve risks, including loss of principal. Please note that an investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. This chart illustrates the historical performance of the Standard & Poor’s 500 Index (S&P 500) before and after the bear market bottoms of October 3, 1974, December 4, 1987, October 9, 2002, and March 9, 2009. Cumulative total returns include reinvestment of dividends and capital gains. The S&P 500 Index is an unmanaged index of 500 stocks that is generally a representation of the performance of larger companies in the U.S.

 

Don't let emotions drive your decisions

Emotions can lead to irrational decision making and impulsive decisions that compromise the realization of stated goals. Before you react impulsively, make a list of your concerns, revisit your goals and review your strategy. If your goals and/or priorities have changed, or if you believe your strategy is no longer appropriate given the economic environment, contact your Financial Professional. When there is fear and uncertainty in the air, when there is scary news that makes you question what you should do, that’s when it’s most important to talk to your Financial Professional. He or she can provide the perspective you need to understand the situation at hand and how it relates to your individual goals and strategy.

 

Market returns (%)

S&P 500 Index from January 2, 1997–December 30, 2016
 


Source: Morningstar Direct.

All investments involve risks, including loss of principal. The chart provided is for illustrative purposes only and represents an unmanaged index in which investors cannot directly invest. Past performance is no guarantee of future results. This chart is for illustrative purposes only and is not indicative of past or future performance of any specific investment.

 


Related Literature

Brochure

Learning from the Lessons of TIME Brochure

Uses covers from TIME Magazine from the past four decades to illustrate that although today's economic worries may feel like something new, a look back at history shows that they are not unprecedented...and that bear markets don't last forever.

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