Today, March 31st, represents the end of the 1st quarter of 2011.
Three months ago, on January 1, 2011, did you expect:
The leader of Egypt to be peacefully overthrown?
The price of oil and gas to increase significantly?
Revolutions to be underway in many Middle East countries?
A major earthquake and tsunami in Japan?
We didn’t either.
However, even with all of the above events, do you realize that the S & P 500, a broad index of 500 large US companies, increased over 6% during these same 3 months.
- This is the largest 1st quarter increase of the S & P 500 during any year from 2001-2011.
Readers of this blog and clients of our firm know that we believe in investing in a globally diversified stock portfolio. This would include large and small US companies, as well as large and small companies in countries throughout the world. Most other “asset classes” also had similarly positive performances during the first 3 months of 2011.
One quick lesson from this information: Even during times of crisis and unexpected news (and almost all periods have some of both), the stock markets throughout the world may still be positive.
That is why we firmly believe in the importance of focusing on the long term and planning for the long term, and not to be focused on the day-to-day volatilities of the stock market or world events.