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Take a Long Term View

Although investing in the stock market has always involved both opportunities and pitfalls, volatility serves as a reminder that it is important to keep a long-term perspective. Consider that in the 84 years from 1926 through 2009, the S&P 500 Index and its predecessor have provided a positive return in 60 years compared to 24 down years. Additionally, major up and down years haven’t been as often. As you can see in the tables below, the S&P 500 Index returned greater than 20% 32 times compared to a worse than -20% return 6 times.

Source: Ibbotson Associates. The performance shown is based on the S&P Composite Index. Currently, the composite consists of 500 stocks (the S&P 500 Index). Prior to March 1957 the S&P Composite consisted of 90 of the largest U.S. stocks. The historical performance figures for the S&P 500 Index are for illustrative purposes only and are not intended to imply or guarantee future performance. The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance. The index cannot be purchased directly by investors. Please keep in mind that high, double-digit returns are highly unusual and cannot be sustained. These returns were the result of certain market factors and events which may not be replicated in the future.