If you have a long time horizon, you can survive just about anything. At least, that’s the implication of a graph I looked at today.
Fidelity Investments is showing off a graph called “S&P 500 Index & Major Global Events” in “Putting Short-Term Market Turmoil in Perspective: U.S. stocks have proven resilient over the long term.”
It’s a graph of the S&P 500 index with major events from JFK’s assassination in 1963 to this year’s collapse of Bear Stearns.
The article concludes: “U.S. stocks have proven to be resilient over the long term. A $10,000 hypothetical investment in a diversified mix of large-cap domestic stocks at the start of 1963 would have been worth more than $865,000 at the end of June 2008.”
$865,000 is a nice big number. But how many investors think in terms of a 45-year time horizon?
On the other hand, maybe that’s the point. A 45-year time horizon isn’t just for college kids. Even middle-aged folks may live another 45 years.
Does this graph give you comfort?