Even if you aren’t a history buff, you should have a basic understanding of financial history so that you aren’t surprised by ‘unexpected’ financial downturns. When these downturns inevitably occur, you will be able to stick to your long-term financial plan. Limiting your research to just the past 100 years, financial history evidences significant volatility for both stocks and bonds. Using recent history as a rough guide, you should assume that similar downturns will happen again in the future, even if you don’t know exactly when they will happen.
Continue reading Investing for Retirement: Recalling the Lessons of History