Tune Out the Noise - Root Financial

It’s easy to feel overwhelmed by the relentless stream of news about the stock market.

Negative headlines constantly bombard us with data and present themselves as impactful to your financial well-being. This evokes strong emotional responses from even the most experienced investors.

2000 to 2009 is often referred to as the “lost decade” because the S&P 500 lost a total of -9% during this 10-year stretch.

Headlines from the lost decade can help illustrate several periods that may have led market participants to question their approach.

  • May 1999: Dow Jones Industrial Average Closes Above 11,000 for the First Time
  • March 2000: Nasdaq Stock Exchange Index Reaches an All-Time High of 5,048
  • April 2000: In Less Than a Month, Nearly a Trillion Dollars of Stock Value Evaporates
  • October 2002: Nasdaq Hits a Bear-Market Low of 1,114
  • September 2005: Home Prices Post Record Gains
  • September 2008: Lehman Files for Bankruptcy, Merrill Is Sold

While these events are now a decade or more behind us, they can still serve as an important reminder for investors today. For many, the headlines bring on feelings of elation or despair. We need remember that markets are volatile and recognize that, in the moment, doing nothing may feel paralyzing.

But throughout the ups and down, if you had hypothetically invested $10,000 in US stocks in May 1999 and stayed invested for the next 20 years, that investment would be worth approximately $28,000 today.

Hypothetical Growth of Wealth in the S&P 500 Index, May 1999–March 2018

Meaning you would have almost tripled your money over that 20-year time period, despite the fact that the first 10-years actually lost you money!

When faced with short-term noise, it is easy to lose sight of the potential long-term benefits of staying invested.

And while no one has a crystal ball, adopting a long-term perspective can help change how investors view market volatility and help them look beyond the headlines.

The Value of a Trusted Advisor

In order to avoid giving in to emotion during periods of uncertainty is having an appropriate asset allocation that is aligned with your willingness and ability to bear risk. It helps to remember that if returns were guaranteed, you would not expect to earn a premium. Without the risk there is no reward!

Creating a portfolio you are comfortable with, understanding that uncertainty is a part of investing, and sticking to a plan is key to pursuing a better investment experience.

However, as with many aspects of life, we can all benefit from a bit of help in reaching our goals.

The best athletes in the world work closely with a coach to increase their odds of winning. Many successful professionals rely on the assistance of a mentor or career coach to help them manage the obstacles that arise during a career.


They understand that the wisdom of an experienced professional, combined with the discipline to forge ahead during challenging times, can keep them on the right track.

The right financial advisor can play this vital role for an investor. A financial advisor can provide the expertise, perspective, and encouragement to keep you focused on your destination and in your seat when it matters most.

A recent survey conducted by Dimensional Fund Advisors found that, along with progress towards their goals, investors place a high value on the sense of security they receive from their relationship with a financial advisor.

Primarily Measure the Value Received from Your Advisor?

Having a strong relationship with an advisor can help you be better prepared to live your life through the ups and downs of the market. That’s the value of discipline, perspective, and calm.

That’s the difference the right financial advisor makes.