Don't take investment advice from headlines

The U.S. has attacked Iran and Venezuela this year. Would it be smart to invest in oil companies?

The tariffs aren’t going away. Is it time to switch to international stocks?

No one knows what will happen in the November elections. Should I sell everything now and just wait it out?

There’s nothing like scary headlines to make you second-guess your investment strategy. There’s also nothing wrong with being concerned – even afraid – of what’s going on the world these days. What separates investment success and failure, however, usually comes down to whether you choose to act on those worries and fears.

It hasn’t been that long since Covid made us wonder if it was safe to leave home in the morning. And watching stocks lose more than a third of their value in just over one month in early 2020 didn’t make things any easier.

Now think back a little further to the Global Financial Crisis of 2007-09, sparked by the sudden collapse of a housing bubble they said could never happen. The S&P 500 dropped 57% before finally bottoming in March of 2009.

I can recall trying to coach nervous clients through my first real bear market as their financial advisor, the Dot-Com Crash of 2000-02, which saw stock prices nearly cut in half (-49%) over a grueling two-year period.

Heck, I can even remember my mother lending me her car on the day I turned 16 – on the condition that I go and wait in line at the gas station to purchase our five-gallon weekly allotment. The Arab Oil Embargo of 1973-74 brought gasoline rationing, hyperinflation, and a 48% collapse in the stock market.

It would be many years later before I had any real money to invest. But since the age of 16, I’ve personally been witness to nine full-fledged bear markets. And every single one of them came with the temptation to do something, out of either the fear of bad things that might happen or in response to bad things that already had. If you’ve owned equities for any time prior to January 2022 (the start of the most recent bear market), then you have no doubt faced that same temptation.

Today, Brown Family Wealth Advisors directly manages more than half-a-billion dollars of client assets (as of March 4, 2026). But even more important than making daily investment decisions is our responsibility to help those clients avoid making snap decisions based on emotion – decisions we are convinced are harmful to their long-term investment success. We’ve always believed that how investors behave is more important to that success than how their investments behave.

One of the tools we use is providing some historical perspective from time to time, by sharing some of the lessons learned since those long gasoline lines of half-a-century ago. We start by acknowledging how economic, market, and political turmoil make us all naturally feel. And then we look back to some extreme events that tempted us to emotionally act on our fears, and review what has happened since.

2020 Covid Crash

A $100,000 investment in stocks (as measured by the S&P 500) at the market’s peak just before the 2020 Covid Crash in February 2020 would be worth $211,426 as of the end of January 2026. And that doesn’t count the $19,351 you would have received from dividends simply by holding on. By the way those dividends increased faster than the overall cost of living over the same period.

2008 Global Financial Crisis

A $100,000 equity investment at the market’s peak in October 2007 just prior to the 2007-09 bear market would be worth $450,042 as of the end of January. Investors earned another $183,723 in dividend income along the way, increasing 2.9x versus 1.6x for the Consumer Price Index.

2000 Dot-Com Crash

$100,000 invested in S&P 500 stocks at their absurdly overvalued peak in March of 2000 would now be worth $480,451. Dividends increased 4.7x versus 1.9x for the CPI over the same period, adding another $283,270 to an investor’s bank account.

1973-74 Bear Market

We’re on the verge of getting silly now. In the equally absurd likelihood that I’d had $100,000 to invest in stocks at the January 1973 market peak before waiting my turn at the Sunoco station, my hypothetical investment would be worth well over $5.8 million today – not counting dividends totaling $18.4 million(!) more. Those dividends increased by 25.1x while the cost of living rose just 7.6x.

It’s important to note that each of these historical examples would have required you to invest at the worst possible time (a major market peak) and then sit tight while watching half or more of your money temporarily disappear. Alternately, you could have reacted emotionally to what was making news at the time and simply avoided stocks altogether. That’s not the way to build wealth, maintain it, or create a retirement income that increases faster than your cost of living.

Lessons learned: 1) Own stocks for the long run; 2) Reinvest dividends when you can; 3) Refuse to sacrifice long-term rewards to avoid short-term risks; 4) Don’t make changes to your portfolio based on what just happened, or what you think is about to happen; and 5) Consider equity dividends as a way to stay ahead of inflation throughout retirement.

(Data sources: Standard & Poor’s, OfDollarsAndData.com, Franklin Templeton Investments)

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This is a hypothetical illustration and is not intended to reflect actual performance. Future performance cannot be guaranteed and investment yields will fluctuate with market conditions. Investments involve risk and you may incur a profit or a loss.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Mike Brown and not necessarily those of Raymond James.

You should discuss any tax or legal matters with the appropriate professional.