Tuning Out the Noise

For investors, it can be easy to feel overwhelmed by the relentless stream of news about markets.

Being bombarded with data and headlines presented as impactful to your financial well-being can evoke strong emotional responses from even the most experienced investors. Headlines from the ”lost decade”^[1] can help illustrate several periods that may have led market participants to question their approach.

May 1999: Dow Jones Industrial Average Closes Above 11,000 for the First Time
March 2000: Nasdaq Stock Exchange Index Reaches an All-Time High of 5,048
April 2000: In Less Than a Month, Nearly a Trillion Dollars of Stock Value Evaporates
October 2002: Nasdaq Hits a Bear-Market Low of 1,114
September 2005: Home Prices Post Record Gains
September 2008: Lehman Files for Bankruptcy, Merrill Is Sold

While these events are now a decade or more behind us, they can still serve as an important reminder for investors today. For many, feelings of elation or despair can accompany headlines like these. We should remember that markets can be volatile and recognize that, in the moment, doing nothing may feel paralyzing. Throughout these ups and downs, however, if one had hypothetically invested $10,000 in US stocks in May 1999 and stayed invested, that investment would be worth approximately $28,000 today.

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