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Podcast123: Fancy Annual Declines Of 13.9%??

informed decisions blog

Podcast123: Fancy Annual Declines Of 13.9%??

5th February 2019

Paddy Delaney


Welcome back to the new home of Personal Finance in Ireland, where we share insights which we hope help you to avoid mistakes and achieve the results you seek. All we ask in return for sharing these ideas is to tell a friend, and use the ideas with the intention in which they are shared, thanks!


The title of this week’s blog is a little vague or possibly might appear abstract, granted, but I do believe that it’s contents will help people to see the light! To help explain, I was speaking to an advisor recently who I was helping to connect with and recognise the real value she can bring to her clients. She is an experienced advisor who is trying to transition from an old-school sales-person to operate in a more transparent and client-focused way. As you know I am all about the transparency and the client-focused side of things so I was more than happy to play a small part in helping her make this transition.

Anyway, we were chatting about investments and recent volatility, I passing the recent volatility off as ‘par for the course’ while she was very much seeing it as a distraction and bordering on something to be fearful of as an investor. At that point I mentioned something like ‘but sure it’s only down in the region of 15%, that happens every year on average, and it’s the very thing that rewards those who stay invested’. She looked at me as if I had two rock-filled heads. She stated that there is no way that global equities have declines of that amount every year, even on average………and that is where she was very much ill-informed, and where I guess the vast majority of us are also ill-informed. Let’s fix that!

J.P Morgan Guide To The Markets

I have mentioned this beauty of a quarterly document before here, and I wish to re-iterate that (as far as I am concerned) it is one of the most easily digestible and insightful economic/investment/macro reflections available anywhere, at absolutely no cost. Click here to get the December edition. So in my conversation with the advisor I was working with I referred to this nugget. Page 14, to me, is essential reading for anyone that is ever contemplating investing in any form of decent equity portfolio. Irrespective of the fact that this chart, as you’ll see below, is a reflection on the top 500 Companies in the USA only (S&P 500 Index), summarises what long term investing is about, and indeed portrays the great contradictions of equity investing, you face temporary declines but always win over the long term!

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