We are all feeling the pain of the recession.  And many people are comparing it with 1929.  Even though no serious economist is saying that they ARE comparable, let’s assume that things will get as bad as they were in the Great Depression.  What actually happened to investments during that time?

Let’s assume that you were unlucky enough to invest $100,000 in the S&P 500 on Sep. 3, 1929, the height of the market and the worst date to invest.  By July 1932, that $100,000 had shrunk to $11,000.  By 1950, that $11,000 rebounded to $100,000!  By the end of 1959, that $100,000 had increased to $600,000!

Your money went from $11,000 to $600,000 in 27 years.  What do we make of that roller coaster ride?  The point here is that patience makes you money.  Being diversified makes you money, too.  Having $11,000 to invest in 1932 was a huge advantage over having nothing.  (And those who had invested in one or two stocks may well have had nothing in 1932!)

You’ve already endured the pain of loss.  This is the opportunity of a lifetime:  invest in a diversified portfolio, like the Rainbow Portfolio™, find excitement in other areas of your life (rock climbing, hang gliding, scary movies, rollerblading), and sit back and watch your money grow over the next 27 (and more) years. And even if you don’t have 27 years of life left, at this point, the probability of a rebound is higher than a protracted decline.