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What Can We Learn from the Market Disasters of the 1970s?

Throughout history, when bad news and events touched the daily lives of investors and caused nest eggs to shrink, it’s been natural to ask, “Is this the end of investing as we know it? Have new developments changed things so much that the old patterns no longer apply?”

These four stories should help illustrate an important investment principle: Markets have always gone up and down, sometimes in dramatic and alarming ways. For investors who have maintained diversified portfolios over the long term, the stock market has consistently provided a positive investment experience.[/vc_column_text][vc_column_text]What Can We Learn from the Market Disasters of the 1970s?[/vc_column_text][/vc_column][/vc_row][vc_row type=”in_container” scene_position=”center” text_color=”dark” text_align=”left” overlay_strength=”0.3″][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ width=”1/2″][vc_column_text]Screen Shot 2016-06-03 at 8.59.39 AM[/vc_column_text][/vc_column][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ width=”1/2″][vc_column_text]The 1970s were a turbulent time. An oil embargo, gasoline rationing, high inflation, and rising food prices were a part of daily life for Bob and his family. The pervasive mood of the decade was pessimism.

Adding to his concerns, Bob became an investor in 1970. Stock returns through 1973 and 1974 were some of the worst in history. In 1979, a major publication declared the “death of equities.”

How could Bob possibly have had a positive investment experience?[/vc_column_text][/vc_column][/vc_row][vc_row type=”in_container” scene_position=”center” text_color=”dark” text_align=”left” overlay_strength=”0.3″][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ width=”1/1″][vc_column_text]Screen Shot 2016-06-03 at 9.48.32 AMScreen Shot 2016-06-03 at 9.49.08 AM[/vc_column_text][vc_column_text]Screen Shot 2016-06-03 at 10.11.51 AM[/vc_column_text][/vc_column][/vc_row][vc_row type=”in_container” scene_position=”center” text_color=”dark” text_align=”left” overlay_strength=”0.3″][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ width=”2/3″][vc_column_text]How could Bob have had a positive investment experience? He did it by building a diversified portfolio and staying disciplined through the ups and downs. Bob reduced his volatility by diversifying among stock asset classes and targeting a healthy dose of fixed income. The discipline in maintaining his allocations, especially during the bad times, kept him positioned to gain when small stocks and international stocks surged.

Click here to download the rest of our ebook, “Investing Through the Decades.”

[/vc_column_text][/vc_column][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ width=”1/3″][vc_column_text]Screen Shot 2016-06-03 at 10.12.00 AM

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