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While the lava lamps and folk music of the time aren’t in vogue anymore, Bob Dylan’s anthem, “The Times, They Are A-Changin’” seems just as fitting today as it was in the tumultuous 1960s when it was written. It may feel as if we’re living in uncharted waters now: inflation, political polarization, geopolitical tensions … but are the issues we’re facing today really that unprecedented?

The truth is that we’ve overcome challenges and tumult before—both from an economic and cultural standpoint. In fact, the challenges we’re facing today are echoes of strife from prior decades.

For example, inflation was a standout feature of the late 1970s and early 1980s, but it moderated significantly in the decades following. Now, the Federal Reserve's interest-rate hikes to combat the inflation that followed the COVID-19 pandemic have returned us to an era of higher interest rates. Rates above 4% feel foreign after an unusually long period of near-zero rates following the Great Financial Crisis (GFC), but were, in fact, standard for much of the decades prior to the GFC—and still pale compared to the double-digit rates in the 1980s. And yet through all of these varying environments, investors who stayed the course were eventually been rewarded.


Because People—And Markets—Are Resilient

The challenges we’ve faced have taken place in the midst of market volatility, bear markets, bull markets, inflation, stagflation, energy crises, and heightened geopolitical tensions. In other words, we’ve been through the social and economic wringer before, yet we’ve persevered.

Most telling of all? During the last 6 decades, only one (the 2000s, in the wake of the Global Financial Crisis) generated negative stock returns for the entire decade; bonds generated positive performance in every full decade.

 Average Annual Return (%)
  Decade   Bonds Stocks
1960s 3.48 7.81
1970s 6.96 5.87
1980s 12.43 17.55
1990s 7.70 18.21
2000s 6.33 -0.95
2010s 3.75 13.56
2020s -0.72 12.04

Past performance does not guarantee future results. Stocks are represented by the S&P 500 Index, which is a market capitalization-weighted price index composed of 500 widely held common stocks, using data calculated by Ibbotson Associates. Historical data from 1929 to 1969 is calculated by Ibbotson. Bonds are represented by the IA SBBI LT Government Index, which measures the performance of a single issue of outstanding US Treasury note with a maturity term of around 5.5 years. Indices are unmanaged and unavailable for direct investment. Source: Morningstar, 2/24.

In Other Words

For clients who are concerned about the state of markets today, historical perspective such as this can help them feel more confident—and stay invested. A look back at history shows that despite all manner of challenges, financial markets have historically moved onward and upward, as has our nation as a whole.


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1 This article is based on our popular The Times They Are A-Changin'  brochure. Click here to access additional content to share.


Important Risks: Investing involves risk, including the possible loss of principal. • Fixed income security risks include credit, liquidity, call, duration, and interest-rate risk. As interest rates rise, bond prices generally fall.


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