Lessons from ‘extreme events’

Attempting to time markets is very difficult (even the professionals find this a challenge).

So when an extreme market event occurs such as the Post World War II crash, or the Dot Com crash, remaining invested through the difficult times has eventually paid off.

While stock markets falls are painful, history does show us that they eventually recover. Here are some graphs attached.

The principles of long-term investing are lessons from history

Stay disciplined

by missing the 10 ‘best days’ in the stock-market between 2003 and 2017, your investment returns would have been 48% lower.

Volatility is part of investing

despite the last ‘Bull Market’ being one of the longest on record. There were still double digit (greater than 10% falls) in 8 of the 11 years.

Over the longer-term investments in growth assets is rewarded

In any 10 year period the odds of equities making a negative return is less than 10%. Deposit rates are at historically low rates and those that invest into growth assets (such as equities/shares) will be rewarded.


An investment that is diversified will tend to be less volatile than one investment asset class on its own. Longer term investors are better able to weather any extreme market events if they have diversification.

Source: All market data is kindly provided by Zurich Life, FE Analytics and Bloomberg, April 2020

We are here to help you make a better decision.

If you have a financial planning or product question please contact us. Know more. 091 44 11 88 or office@nelsonlife.ie

This article was written by Rory Nelson, founder of Nelson Life. Rory is celebrating 20 years in financial planning this year. Professional qualifications include; UCD Specialist Diploma in Wealth Management, Pension Trustee Practitioner PTP, UCD Professional Certificate in Stockbroking,UCD Professional Certificate in Asset Management (SIA),  QFA FLIA, Pensions Diploma, Mortgage Advice Diploma, CFP module – Tax & Estate Planning and has a degree in BA Accounting & Finance. He has regularly participated in national financial press.


Nelson Life is regulated by the Central Bank of Ireland.

We are Trusted Financial Advisors and now have access to 20 products providers (we are NOT tied to one provider).

WARNING: Past performance is not a reliable guide to future performance.WARNING: The value of your investment may go down as well as up.WARNING: You may lose some or all of the money you invest.WARNING: These funds may be affected by changes in currency exchange rates.WARNING: If you invest into this product you will not have access until you retire.WARNING: The above content does not constitute investment advice, as it does not take into account the investment objectives, knowledge and experience of financial situation of any particular person. Prospective investors are advised to make their own assessment of the information contained herein and to obtain professional advice suitable to their own individual circumstances.WARNING: The information contained in this document is based on our understanding of current tax legislation and the current Revenue Commissioners interpretation thereof and is subject to change including retrospectively without notice. This is intended as a general guide only and is not a substitute for professional tax, legal and investment advice. 

Visit our website http://www.nelsonlife.ie

web | www.nelsonlife.ie

blog | www.nelsonlife.ie/blog

twitter | https://twitter.com/nelsonlife_

Linked In | https://ie.linkedin.com/in/rory-nelson-5a607415