On a Knife’s Edge

This how many investors feel! Uncertainties abound; among them a reacceleration of the Covid-19 pandemic, a very important Presidential election, the future course of the economy, and much more. It is no wonder that many want to stay on the sidelines for a while. Sometimes, however, the unknown is feared more than the actual event when it occurs; this is simply human nature. Thankfully, at least the election will be held soon.

There are still trillions of dollars on the sidelines with few alternatives to earn returns. That is one of the reasons that many of the selloffs have been so muted this past year. Even the big collapse this Spring bounced back rapidly. Money needs to be put to work. The current environment may provide another good opportunity.

To put things in perspective, did you know that analysis of the market history from 1926 until 2011 shows the probability of earning a positive return over various time periods for the stock market. They are as follows:

• 1 year – 73.65%
• 3 years – 82.35%
• 5 years – 86.74%
• 10 years – 94.19%
• 15 years – 99.77%
• 20 years – 100%

This may not make anyone feel confident about the short-term, but it does show that long-term investing is a good bet. We will all get through this difficult time, do not give up on the U.S. and stay steady!

The Lonely Bull