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Putting it All into Perspective
By Sean G. Todd, Esq., M. Tax, CFP, CPA
The US stock market has taken investors on a bumpy ride in recent years. This volatility has tested investor discipline and prompted some doctors to question their commitment to equities. While no one knows the future, looking at the past may help you gain a better view of long-term market performance and put the recent market volatility in perspective.
Historical Performance
The historical distribution of US market returns since 1926 tells us that performance years are stacked in ascending order by return range. For example:
- Market performance over the past two years has been extreme by historical standards. In 2008, US stocks experienced their second-worst calendar return in eighty-four years. Then, in 2009, stocks rebounded strongly to deliver a return in the top quartile of the historical distribution.
- Over the long term, the market’s positive return years have outnumbered the negative return years. Since 1926, the market has experienced a positive return in almost three-quarters of the calendar years.
- Not only are the positive years more numerous, there is a larger concentration of performance in the higher ranges of returns.
- The sequence of calendar returns appears random, suggesting that accurately predicting future performance is a difficult task for any investor, physician or professional manager.
UPDATE: https://money.cnn.com/data/markets
Assessment
Over time, the market has rewarded investors who can bear the risk of stocks and stay committed through various periods of performance. And, professional counsel and advice goes a long way in helping you develop, implement and maintain your strategy.
Conclusion
The recent extreme market volatility has challenged many physician investors to rethink their investment strategy or to prompt them to initiate an investment strategy. And so, your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe. It is fast, free and secure.
Conclusion
Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.
Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
- PRACTICES: www.BusinessofMedicalPractice.com
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- CLINICS: http://www.crcpress.com/product/isbn/9781439879900
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- FINANCE: Financial Planning for Physicians and Advisors
- INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
- Dictionary of Health Economics and Finance
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- Dictionary of Health Insurance and Managed Care
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Filed under: Accounting, Investing, Taxation | Tagged: CPA, equities, Investing, Sean Todd, stock market, US stocks |
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