The stock market returns are far from consistent. As such, if you happened to first start investing in a time of huge growth, you may be led to falsely believe that is the norm. Yet, as any seasoned veteran investor will tell you, the market goes through long ups and downs.
Consider this horror case: If you started dollar cost averaging into the S&P 500 in February of 1997, you wouldn’t (permanently) break even until September 2009 – and you wouldn’t beat inflation until October 2011.
Warren Buffett has a strategy to remain level-headed. He keeps historic newspapers from market catastrophes on his office wall as a reminder that “anything can happen” .