FINANCE COMMUNITY EXPERT: Claritas Wealth

Wall of Worry

by Tim Walsham, Claritas Wealth

A timeline of negative world events and their effects on the economy

It can feel that there’s a never ending stream of negative world events that dominate the news. I’m not looking to downplay the significance of any of these events but to highlight how resilient global stock markets are in spite of everything.

Yes, we experience temporary declines but the long term rise in markets is relentless. Each time a major negative event occurs, the press will write that ‘this time it’s different’ and that everyone should bail out of their investments. History being our guide, it will be a temporary decline and long term investors will be rewarded for patience and fortitude.

The chart relates to the global stock market and, in practice, many investors hold a portion of their portfolios in defensive assets to reduce the ups and downs to a level that they’re comfortable with. It’s important that any investor has a portfolio that they are able to stick with through thick and thin.

But the message is that, over timescales that are relevant to most investors, global stock markets are hugely resilient.

Not much more to say than that; I just thought that this is a really interesting chart!