The chart below shows monthly stock returns going back over 70 years. Tons of volatility and pain. No wonder investing is hard.
We live in the present, or at most, we live in the very recent past, say a month or so at a time. We tend think about what just happened, and then, most of the time, we think about a month or so in the future.
Conversely, people who can successfully regulate their ability to sustain short-term pain have been handsomely rewarded. In less than 50 years, those painful monthly moments resulted in generating more than 1,200% returns, turning every $1 into over $120.
Mic drop.
-Paul R. Rossi, CFA