(This blog post, 4 Charts Every Investor Should Know, was compiled and revised from a newsletter sent out by Loring Ward, our investing partner).
Sometimes a picture really is worth a thousand words. In this post, I’ll share four charts that I believe every investor should understand. These charts focus on some of the basics of investing, like focusing on the long term, diversification, and not letting emotions drive your portfolio.
#1: Let Markets Work for You
Good things come to those who wait—and to those who don’t let short-term news events scare them out of staying invested for the long-term. Every generation of investors has had its reasons to worry and pull out of the market from the Great Depression, World War II, and Vietnam of earlier generations, to the more recent Black Monday, dot com bubble, and Great Recession. But if you had invested $100 in the U.S. stock market back in 1972 and left it alone all those years, that $100 would have grown to $11,086 by the end of 2017. Decade after decade, markets around the world have been significant generators of long-term wealth for patient, diversified investors.
(see footnote #1)