The Benefits of Investing Consistently
Sometimes you only need to hear about The Crash of '29 or remember the aftereffects of the World Trade Center attacks to decide that investing is too volatile for you. But often it takes perspective more than anything else to be a successful investor.
There have certainly been many times throughout history when the North American markets have temporarily stumbled. But that doesn't mean you shouldn't invest. In fact, regardless of political events, economic conditions and short-term setbacks, the stock markets have prospered over the past seven decades.
What's even more interesting is that, very often, the reasons people choose not to invest might actually be reasons to consider investing more. Counterintuitive perhaps, but as the chart below shows, some of the best opportunities have arisen when things appeared to be at their worst.
How $10,000 Invested Grew (U.S. Stock Market)
| Date | Event | 5 yrs. Later* | 10 yrs. Later* | 20 yrs. Later* |
| Dec. 1933 | Unemployment hits 24.9% | $17,025 | $20,489 | $78,046 |
| Dec. 1941 | Pearl Harbor | 21,831 | 47,243 | 216,258 |
| Jan. 1951 | Fall of Seoul | 28,170 | 47,627 | 102,329 |
| Oct. 1957 | Sputnik | 15,813 | 30,858 | 43,580 |
| Oct. 1962 | Cuban Missile Crisis | 19,639 | 27,440 | 52,513 |
| Aug. 1974 | Nixon resigns | 17,564 | 34,480 | 138,041 |
| Dec. 1980 | Prime Rate hits 21½% | 19,238 | 35,669 | 178,276 |
| Dec. 1990 | Gulf War | 22,115 | 51,351 | N/A |
| March 2003 | War in Iraq | 14,729 thru 12/31/04 | N/A | N/A |
Source: Ibbotson
*All figures are calculated based on the month end date for the month in which the event occurred. Assumes $10,000 invested in the S&P 500 on beginning date through period listed. This example is for illustration only and not indicative of any investment. Assumes reinvestment of income and no transaction costs or taxes. This is for illustration only and not indicative of any investment. Past performance is not indicative of future results. Data through June 2004.
