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If you’re feeling a little lost on your investing journey right now, you’re not alone. Stocks are pushing back towards record highs, yet “uncertainty” is still the buzz word as investors face a host of complicated issues: a global pandemic, civil unrest, China tensions, and several others.

Many investors called this year’s selloff the opportunity of a lifetime, and now you may feel like you’ve missed out. At the same time, the future may feel too uncertain for you to take the plunge. Investing in a normal environment can be a daunting experience, so it’s understandable if you’re a little overwhelmed now. The noise can be deafening, but we’re here to help.

The chart shows the S&P 500 Index performance from Jan 1, 2020 to June 3, 2020. It shows a sharp dip of -34% from Feb 19 to March 23, followed by a steady gain of +45% from March 24 to June 8.

Embrace the uncertainty.

No one has a crystal ball, and things may feel unclear now, but don’t let that keep you from focusing on your financial future.

You have to swallow a bit of uncertainty when investing. Sure, it’s tough to say where the economy or stocks are heading this year. Frankly, though, the market’s moves are rarely predictable, especially when the market gets hit by a “black swan” event (one that nobody saw coming). Even Wall Street’s best investors are frequently wrong about where the market is heading – even they don’t have a crystal ball!

Still, there can be value in investing — even if you don’t know what the future holds. Over the long term, stocks can provide investors with ample returns from a liquid, robust market. Since 1950, the S&P 500 has risen an average of 8% annually. During that time, investors have endured 11 economic recessions, 10 bear markets (drops of 20% or more), and 24 corrections (declines of 10% or more). Not too shabby.

More recently, equities fully recovered from the Great Financial Crisis (and at the time, it felt like the world was ending). Investors who stayed patient during that turbulence reaped the benefits in the 10 years after that, during which the S&P 500 more than tripled in value.

Get started early.

As your time in the market increases, so do the benefits of compounding, or the exponential growth in your portfolio that happens on top of any previous growth in your original investment. Compounding is the “snowball effect” that can happen when you invest, even small amounts, over a long period of time, and earn returns on your growth. It’s a powerful tool. Albert Einstein once even called compounding the “eighth wonder of the world.”

It may be difficult to motivate yourself to start now, and we get that. Doing anything for the first time requires some upfront work. But starting early is crucial in investing, even if you can’t put in much money at first.

Consider this: If you started putting $20 a month into a hypothetical, no-fee S&P 500 fund, you’d have about $1,500 at the end of five years (assuming the fund grew at an 8% average annual rate each year). Wait another five years, continue to invest $20 a month, and at that growth rate, you’ll have about $3,700. And if you’re super patient and watch your money grow, you’ll see about $11,800 at the end of 20 years (again, assuming that annual 8% growth rate).*

The chart shows how investing just $20 per month can grow over time with average 8% annual return. The first example shows that if you invested $20 per month 20 years ago, you would have $11,780. If you started 10 years ago, you would have $3,659, and if you started 5 years ago, you would have $1,470.

Compounding can be tough to conceptualize, but don’t let that stop you from letting it work for you. If you have time on your side, you could have one of the best opportunities to start investing.


Market swings can be too much to stomach for some investors. That’s OK – we all have different risk tolerances. If you’re feeling that way, you may want to consider spreading your money out across a balance of aggressive and more conservative assets. That’s what Wall Street refers to when it preaches the benefits of diversification.

Throughout history, a portfolio with both stocks and bonds has proven to be more insulated from market stress than portfolios made up exclusively of stocks. Let’s go back to that hypothetical stock portfolio (based on the S&P 500) we talked about earlier. In this last selloff, an investor holding that portfolio would have lost as much as 31% year-to-date. If that same investor allocated 60% of their money to that hypothetical S&P 500 portfolio and the remaining 40% to a diversified portfolio of bonds (represented by the Bloomberg Barclays U.S. Aggregate Bond Index), they would’ve only lost a maximum of 19% year-to-date.

The chart shows that a diversified mix of stocks and bonds can protect against losses. The first example shows a 100% S&P 500 stock portfolio with a max loss of -30.7% during the dip in the market from Feb to March 25, 2020. The second example shows a portfolio of 60% stocks and 40% bonds with a max loss of -18.7% during the same time frame.

Of course, you may give up some returns during the stock-market rebound, but that might be a fair trade if it helps you sleep soundly at night.

If you’re feeling a little uneasy, you may want to consider other areas of the market. Defensive investments, such as gold and dividend-paying stocks, could provide reliable performance in the face of uncertainty. Gold may act as a buffer against an economic downturn, while high dividend payers tend to have more stable financial profiles.

Remain calm.

Above all, remain calm and remember your goals. Panic selling — or the act of selling when you don’t need to just because the market is falling — is one of the biggest mistakes you can make. Historically, the S&P 500’s worst days and best days have occurred in clusters, and the recent selloff is a great example. If you sold stocks on March 16 – the day the S&P 500 fell 12%, its worst drop since 1987 – you would have missed some (or all) of the 40% rebound we saw through June 8.

The chart shows that typically high days and low days in the stock market tend to cluster together. From May 2019 to April 2020, the 10 best days and the 10 worst days for stock performance on the S&P 500 all occurred between Feb and March 2020.

The opposite scenario – trying to sell at the right moment – could also be a huge risk.

The moral of the story? Avoid emotional investing by making decisions according to your plan. Besides, as we mentioned earlier – time in the market beats timing the market. If you have time on your side, it may be better not to sweat the daily ups and downs.

We’re here for you.

There’s a lot to take in as an investor, especially these days.

Don’t worry, we’re here to guide you through this. Check out Ally’s Invest’s Digital Conference on June 24. It’s an all-day event divided into two sessions that’ll cover the most important topics for investors of all skill sets.

Register for Ally Invest’s Digital Conference.


* Past performance is no guarantee of future results.

The opinions expressed here are not meant to be used as investing advice. For more information, visit our website.

Speech bubble icon next to text "Expert Take"

Headshot of Lindsey BellLindsey Bell is Ally’s Chief Investment Strategist, responsible for shaping the company’s point of view on investing and the global markets. She is also President of Ally Invest Advisors, responsible for its robo advisory offerings. Lindsey has a broad background in finance, with experience on the buy-side and sell-side, in research and in investment banking and has held roles at JPMorgan, Deutsche Bank, Jefferies, and CFRA Research.

Lindsey holds a passion for teaching individuals how to become successful long-term investors. She frequently shares her knowledge as a guest on national news outlets such as CNBC, CNN, Fox Business News, and Bloomberg News. She also serves on the board of Better Investing, a non-profit organization focused on investment education.