- $100 invested in the S&P in 1928 would be worth nearly $900,000 today.
- The US equity market has been through its ups and downs but the trend over time is positive.
- Because timing the market is difficult, investing for the long term may be the best solution.
"It's never paid to bet against America. We come through things, but it's not always a smooth ride."
- Warren Buffett
"Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn't, pays it.”
- Attributed to Albert Einstein
The past few months have been tumultuous, to say the least. We’ve had an assassination attempt on one US presidential candidate, another candidate drop out of the race, and continued global conflicts in the Middle East and Ukraine. Since mid-July the S&P 500 has dropped almost 5% and investors may be worried that a full blown correction could happen.
While there certainly is uncertainty out there and reasons to be fearful, we tend to come back to Warren Buffett’s wise words quoted above. Over the past 100 years or so, we’ve come through two world wars, a great depression, the Vietnam and Korean wars, a worldwide financial crisis and a once-in-a-lifetime COVID-19 pandemic. Through it all, the American economy has managed to thrive.
When it comes to investing, we believe the investors’ best friend is time. As Einstein noted, compound interest can be very powerful when planning to meet financial goals. Since the inception of the S&P Index in 1928 (first at 90 stocks and then growing to 500 in 1957), the market has appreciated at approximately 10% per year.1 That means that $100 invested in 1928 would have grown to nearly $900,000 by the end of 2023.
In our view, staying fully invested through thick and thin is the prudent approach to the equity market.
Important Disclosures & Definitions
1 J. Royal, Ph.D and A. O’Shea (May 4, 2024) What Is the Average Stock Market Return? Nerdwallet.
AAI000730 07/30/2025
