Forget decades of proof: 2020 alone makes the case to investors for “staying the course”

Casey Bear |

Many investors recognize the benefits of remaining steadfast in the face of uncertainty, even when it feels dangerous or uncomfortable.  Indeed, decades of market evidence prove that over the long-term, panic-selling during economic downturns is usually a far less successful strategy than staying the course.  From January 2008 to September 2020, a period that includes the Great Recession, the Standard & Poors (S&P) 500 index returned an average of 9%[1].  Extending the horizon, the average annual return since 500 stocks were adopted into the S&P index in 1957 is roughly 8%[2]. 




These long periods reliably show the value of holding investments steady over time, but rarely does a single year, filled with economic and geopolitical instability and a pandemic no less, so clearly highlight the merits of the strategy.  In 2020, despite a market sell-off, record unemployment in the United States, and volatility in nearly every major equity index and bond fund, the S&P 500 index was up 18.4% for the year[3].  Investors didn’t have to time the market, pick individual winning stocks, or make risky bets to succeed in 2020; all they had to do was follow age-old advice to stay the course when things get scary. 

At Cranbrook Wealth, we help clients manage risk and plan for the future, regardless of what the year may bring to the markets.  To get a lifetime perspective on your complex financial situation, contact a Cranbrook Wealth Management investment advisor


[1] Bloomberg, First Trust Advisors, L.P., 1/1/08-9/30/20