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What is the "Wall of Worry"?

"For 240 years it’s been a terrible mistake to bet against America, and now is no time to start. America’s golden goose of commerce and innovation will continue to lay more and larger eggs.  And, yes, America’s kids will live far better than their parents did.” - Warren Buffet

Clients often hear me mention the concept of the “wall of worry” when current events arise.  This "wall of worry" is a way to describe global markets’ ability to continually ascend after short-term disturbances.  Every day seems to bring a new reason investors should worry: trade wars, real wars, natural disasters, massive protest and so on.

A colleague recently shared with me this helpful illustration of the "wall of worry" from First Trust and I couldn't love it more:

History shows us that negativity tends to be a temporary impediment rather than a permanent blockade for markets.  Why is this?  Because capitalism and markets work.   Volatility will always be a feature of investing and should be expected and planned for - not feared.  Climbing the "wall of worry" as an investor is the boarding pass to investor success.

What should an investor do when volatility inevitably arises?  Ensure you are invested in a portfolio built with your long-term goals in mind and with an appropriate amount of equity risk.

Until Next Time,

Devan