2022 was a terrible year for the stock market. Going as far back as 1900, the S&P 500 just had its sixth worst year! It fell about 18% taking dividends into account, and 20% excluding dividends.

This is when people predicting the “next big crash” run rampant. They prey on everyone’s fear and predict the next crisis with great gusto. BUT, it’s never been more important to NOT listen to them and stick to your investment plan.

Remember that this is actually quite normal and is part of the process. There will be many more times during the course of your investing career that feel terrible. If you invest for the next 50 years you can expect to see the stock market drop by at least 20% about SEVEN times.

If you think index funds got slammed this year, people that speculated in higher risk things like tech stocks and crypto got absolutely destroyed… Bitcoin was down 65% and ARKK was down 67%.

Don’t forget, only money that you don’t plan on using in the next few years should be invested in the stock market. On any given year, the market could be up by 50% or down by 50%. It’s impossible to know. So, it’s important to not invest money you will need in the coming few years to pay for things like living expenses, a wedding, a downpayment on a house and so on. The longer you remain invested, the lower the chance you have of losing money and the higher the chance you have of building a significant amount of wealth.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.‎

‎-Vivi & Shane

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