The news over the past year has been terrible. The COVID-19 pandemic has plagued tens of millions of people worldwide, causing hundreds of thousands of deaths. Shocking of the presidential election in 2020 continued to cause unrest, which culminated in violence in the U.S. Capitol on Wednesday. This is a scary moment for the country.
And yet it seems in the eyes of many people in its own bubble, isolated from the violent unrest in the country’s capital. Stock markets jumped to record highs of all time on Thursday morning and continued with a wave of bullishness that continued through a raging long coronavirus crisis, months of economic suffering and increasing division, not only in the US but around the world.
The rift between Main Street and the investment world is worrying. If recent events have made you angry, upset, discouraged, scared or just ready to throw up your hands and hide – believe me, I understand. I feel just about all of those emotions as I reflect on what my country is currently going through.
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But one of the basic principles that binds Americans is the idea that we can all strive to build a better future for ourselves and our loved ones. Investment is an essential element to find the financial success needed to achieve that dream. I think it’s more important now than ever to have and keep a long-term financial plan that includes investing in stocks. Our common goal of achieving financial independence is something we can share, even if we disagree in other areas.
To overcome the challenges of history one by one
This is not the first time that Americans are experiencing difficult times. As my former Motley Fool colleague and best-selling author Morgan Housel wrote last year, we have always found a way to overcome our deepest problems. Referring to a Depression-era diary and his experiences of probably the most economically devastating era in American history, Housel’s lesson was simple: we’ll get through it.
The US stock market’s steady growth over more than a century has been one of the biggest drivers of economic prosperity in the world. This is the envy of other countries around the world, many of whom cannot duplicate its success despite their best efforts.
In that period, we went through almost every kind of crisis. The Great Depression created massive unemployment, but the country found a way to put people to work. World War II threatened the ideals of the United States and much of Western Europe, but sacrifice and hard work led to a victory that provided the basis for a massive economic boom.
After the assassination of President John F. Kennedy, many feared that the ensuing confusion would lead to an attack by US enemies in the Cold War. Yet an orderly transition of power took place, and the markets continued to boom at highs for several years after the event.
Even large-scale violence on our own soil has no evidence of the resilience of the market. The attacks on September 11 closed the market for days and shocked the country, but left determined in its determination to recover. Investors have seen the results in the monumental profits of the stock market over the past twenty years.
We’ll get through this again
Every single one of the events puts our joint decision to the test. Each time, we came out stronger.
The strength has shown in the success of the stock market. Even when some sectors of the economy came under strain, others fell victim and found ways to thrive. Over the years, stock markets have continued their relentless progress.
Moreover, these experiences have shown the true value of high quality businesses. The companies that had strong leadership, innovative products and services, loyal customers and a commitment to doing their best rose to the top. Their shares performed even better than the broader market, and those who were bold enough to invest in their shares enjoyed the benefits.
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The stock market will continue to rely on our ability to unite towards common goals. One of the reasons why US stocks have performed so well throughout history is that the world has respected the country’s commitment to political stability. The American system of laws and institutions has been the pride of the world and has endured and adapted for more than two centuries. We still need to work to ensure that the system continues to adapt and ensure the benefit of all.
One thing is for sure: we will get through this. Part of how we will do this is by finding common ground. The promise of financial freedom for all is something we can all unite with. As investors, we do not just invest in stocks. We invest in businesses and in our fellow human beings. We are investing in a better future. And right now, a better future is the most important thing we can achieve.