This Isn’t the First Anxious Generation. Here’s Why I’m Still Optimistic.
I was reading an article recently that captures how many people are feeling right now.
“At the moment, economists have some very mixed views of the whole economic situation,” it noted. One analyst said the economy had gotten out of control. Others described it as “scary.” Most expressed heightened worry about current trends and public sentiment.
I mention this not because of the insights. It’s because it was written in 1973.
The stock market would go on to fall 43% over the next few years and not fully recover until 1976.¹
I remember that time, and people were anxious. War abroad, discontent at home, and no one knew where it would all lead.
Uncertainty is the natural state of things. No one knows what’s going to happen, or when. But I’m a realistic optimist, because I understand that without uncertainty there can’t be progress.
It’s why I’ve remained confident that tomorrow will be better than today for investors.
There’s a lot of anxiety in the world right now, from geopolitical conflict to global economic upheaval. People sense that the world they’ve known is changing, like the ground is shifting beneath their feet.
This is especially challenging for younger generations. Their lives have been shaped by one disruption after another—from 9/11 to COVID to today’s problems. For many, instability is a defining feature of modern life.
This anxiety can breed cynicism: What’s the point of investing for the future? But history is full of nerve-racking periods. Through it all, markets have responded the way we would hope.
I’ve been working in finance for more than 50 years. I’ve personally experienced periods that felt just as unsettling as what we’re dealing with today. And yet I’ve watched people and public markets lead the way to decades of innovation, prosperity, and opportunity.
As a college student in the 1960s, I lived through campus unrest over civil rights and the Vietnam war. When I worked on the first index funds in the early 1970s, I remember sitting in long gas lines and seeing how the Arab oil embargo impacted families and the global economy. And after starting Dimensional, an investment management firm, during a stretch of double-digit inflation in the early 1980s, we had to navigate a series of stock market crazes, crashes, and bubbles.² Our firm now manages more than $1 trillion on behalf of investors around the world.³
The graduate school at the University of Chicago at that time—home to future Nobel laureates such as Gene Fama, Merton Miller, and Myron Scholes—taught us to always start with the data. Well, we now have more than 100 years of research-quality data on the US stock market. Over the past century, through the Great Depression, World War II, and many later crises, the S&P 500 has returned, on average, about 10% a year.⁴
It doesn’t return 10% every year, but over the long haul returns have been remarkably consistent. That reward for taking on risk has allowed millions of Americans to plan for a better future and take meaningful steps toward living a more fulfilling life.
People are resilient. We find solutions. And those solutions create possibilities. A great way to participate in the upside of human progress is to own a piece of it by investing in the broad stock market.
The good news is that you don’t have to be an insider to have a good investment experience. My parents were children of the Depression. Talk about an anxious time!
They thought of themselves as outsiders and were convinced that only insiders made money. So they never invested. I often think about how much more comfortable their retirement years could have been if they’d had access to what we all have access to today.
The truth is, it’s never been easier to own a low-cost, diversified market portfolio that can serve as the building block for long-term investing.
Probably the hardest part of investing is learning to embrace not knowing what’s coming next. And yet that’s something we’ve been practicing our entire lives, even if we didn’t realize it at the time. It’s all about managing uncertainty, not eliminating it entirely. Uncertainty creates opportunities, and those opportunities have the power to compound over a lifetime.
My point is not to compare hardships or suggest today’s concerns aren’t real. It’s to remind you that history is full of moments that felt permanent while people were living through them.
They weren’t.
Innovation has accelerated. Businesses have adapted. Entirely new industries have emerged. Markets have processed all the disruption and doubt and still delivered meaningful returns. Indeed, the decades that follow periods of rapid disruption can create extraordinary wealth and opportunities for everyday investors. Uncertainty has always been part of progress.
My advice isn’t “Don’t worry.” It’s “Stay calm.” Because history gives us good reason to believe that human ingenuity, entrepreneurship, and the power of public markets can help turn today’s uncertainties into tomorrow’s positive returns.
Stay calm, stay invested, and let markets work for you.
David
P.S. Forbes recently celebrated 250 founders, investors, philanthropists, and educators who took risks on new possibilities, prioritized long-term value over short-term gain, and pursued ambitious ideas across fields. I’m honored to be included and inspired by the stories of people who believe in the power of human ingenuity.