The stock market is down about 18% year to date. Not a good year for the market so far! But these down years are part of investing. The market goes UP about 74% of years. This year is looking to be one of the 26%. Although, I would have said the same thing in 2020 when we were down 35%, and ended UP 18%.

Imagine you went to Vegas and a casino was offering a game where the player wins 74% of the time. If you lost your first game would you stop playing? I hope not. Even a high school stats student can tell you the longer you sit there the more you are going to win. In fact, that casino would be paying out so much they would quickly go out of business.

Luckily for us, the market isn’t funded by gamblers losses like a casino. Instead, it’s funded by the profits and growth of the companies of the world. As long as people are still buying stuff, companies will still be profiting and fueling that 74% win rate game. The 26% of down years come from volatility caused by speculators trying to guess what’s next. Due to stuff in the world (inflation, recession, interest rates, whatever) speculators have pushed the market down so far this year. But do you know what’s going to happen the next year? I have no idea, but I’m sure it’s not the same thing that happened the last year. That’s how it goes.

So don’t get spooked by speculators doomsday predictions and the resulting volatility. Stay at that table with a 74% win rate. The longer you play, and the more money you put in, the richer you will get!

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

-Jeremy

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