Investment Perspectives

Setbacks From Shocks Are Often Short-Lived

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Economic and political shocks occasionally grab headlines and send markets down sharply. In each of the events above, staying invested through the full decline and following year left investors with more capital than before the shock. Brexit is a recent example, as the S&P 500 bottomed just four days after the referendum results and hit all-time highs shortly thereafter. In recent weeks, higher-than-expected wage growth and consumer prices sparked concerns over the trajectory of inflation and interest rates. However, as investors have had time to digest the information, markets have already erased some of the declines. Of course there are no guarantees, but volatility may remain elevated in this environment, so maintaining a long-term perspective and riding out uncertainty could be the best course of action.

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Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.