Terry Baily is a financial advisor for LPL Investment Services. He graduated from Michigan State University with a degree in finance, served in the US Marine Corps as an officer and pilot, and has great experience in advising clients on securing their future financially. Terry is a former member of the Rotary Club of Castro Valley. In his presentation, An Economic and Market Update, Terry made two main points.
- First, investors need to be focused on the long term. The market is volatile with many ups and downs. Individual investors tend to panic when the market turns down.
- Second, he wanted everyone to understand inflation and why it is not typically something to worry about for investors.
As the following slide shows, the issues are complex, but can be managed by following Terry's two main points.
Terry explained that individual investors often make their moves at the wrong time so that they buy high and sell low. Terry showed a number of slides with data that made a compelling argument that the market has grown over time. As one example, a person investing $10,000 in 1980 and who did absolutely nothing with that investment would have over $788,000 today. As another example, he compared the low point of the market over the last decades with the growth in the market. In 2020, the worst day saw the market down 34%, but it grew 15%. In fact, the annualized average growth since 1983 has been 15.8%.
Overall, his main point was “Don’t panic. Stay calm and ride it out. You will be far better off in the end.”