Is This Year Different?

August 03, 2022

Is 2022 different than previous years? We've never seen 2022 before, but we have seen many commonalities in the past that we're seeing in the current economy.

Full Transcript

Hello, welcome to Arista Advice! Question of the week is: "Paul, this year is totally different than any other years that we've had in the past." And I would say, and I did say, yes, you are right. We've never seen 2022. But we have seen many other common characters and cast of characters that we're seeing in the economy right now.

Here's a chart, to help you put things in perspective. Going all the way back to 1950 when this chart was created, thanks to Personal Finance Club, you can see that every year when there's a down year or a dip that the market goes down. You think "Oh this time it's different. Let's get out." You can't get out. Year to date, the market is down. The worst thing to do is to get out, but this chart shows you subconsciously your mind says "It's different. We've never seen this before. You need to react. You need to do something." That's the worst thing to be doing.

The market returns an expected rate of return to investors that stay put to their financial plan, stay invested, and don't allow their emotions to override their decision. They come out ahead. This year, it's a different year but all the things that we're seeing we've seen before.

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