When I was in the ninth grade, I wanted to play quarterback, but I was too afraid to stand up when coach McCarn asked for volunteers. I had a decent arm, but I lacked the courage of my convictions. It was my first year of tackle football, and I was enamored with NFL quarterbacks like Kenny Stabler, Bob Griese, James Harris, and Fran Tarkenton. I wanted to sling the ball all over the field just like my NFL heroes, even though we rarely ran a passing play. Anyways, because I didn’t take a step forward, I ended up playing offensive guard.
Investors who fear a market correction often miss out on the long-term performance of common stocks. Since 1981, the Dow Jones Industrial Average generated an average annual return of 9.15%. A $10,000 investment is now worth $347,000. However, the index experienced several corrections. On October 19, 1987, the Dow fell 22%. During the Tech Wreck from 2000 to 2003, the index dropped more than 30%. The popular index lost more than 45% during the Great Recession from 2007 to 2009. Last year, it dropped close to 30% as the world shutdown from COVID. Despite these occasional setbacks, stocks continue to climb higher.
On the other hand, if you did not want to experience losses, you could have invested in one-month US Treasury Bills. The safest investment in the world has never lost money. If you invested in T-Bills and not stocks, you averaged 4.1%. A $10,000 investment is now worth $50,000, or $297,000 less than your investment in equities.
Stocks are in a constant state of fluctuation. Daily, stocks are unpredictable, but over time, they produce solid returns. Don’t let your fear of losing money keep you on the sidelines. If you want to score generational wealth, you need to own stocks.
Winning means being unafraid to lose. ~ Fran Tarkenton
April 8, 2021
Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM’s custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on the level of your assets.
Note: Investments are not guaranteed and do involve risk. Your returns may differ from those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren’t suitable for every investor.
 YCharts. Dow Jones Industrial Average. January 1, 1981 to April 7, 2021.
 Dimensional Funds 2020 Matrix Book