Black Monday in October 1987 was an unprecedented event as the U.S. stock markets fell almost 22 percent in a single day. The tech bubble crash of 1999/2000 was a remarkable destruction of value, and amid the Global Financial Crisis of 2008, pundits and commentators were speculating as to whether we had seen the end of capitalism as we had known it.
And yet, if we zoom out over the long term, equity markets are a remarkable provider of investment returns. This is the lens through which we should make our allocation decisions. During the darkest moments, we should remember why we made those decisions…and adhere to the plans created in those periods of less turmoil.
I do not know how much damage will be tallied when this is over, but I do know that capitalism creates incentives for investment and, over the long term, has rewarded those who can tolerate the short-term volatility.