Ever since the “tech-wreck” in 2000 the financial markets have had trouble gaining ground. First it was the bursting of the internet bubble in 2000 with a follow-up debacle in the mortgage space just as the market looked to be getting some legs in 2007. With daily fluctuations of 3% and 4% this past summer a lot of people just don’t know what to do and have virtually given up on their stock market related investments.

You have heard this before but if you want to invest in stocks you have to be patient and you have to think long-term. After eleven years of what have effectively been flat markets patience has certainly been more than just tested and we are left to wonder “just what is long-term”?

Frankly, there haven’t been a lot of periods in modern history that we can compare to this time. The depression of the 1930’s is as close a comparison as we have or perhaps the 1070’s. As we know it took a decade or more for the market to recover in those instances. While we averted a depression this time we are only three to four years into the aftermath of the “great recession” the economy seems to be chugging along to the upside and interest rates are low which should help. Yet, many find it hard to qualify for a mortgage and the housing market still has a bad hangover from the backlog of foreclosed homes. A healthy housing market is essential to a robust economy. And then there are the sovereign debt problems in Europe.

So what can we take away from this? Recessions and “bear markets” occur much more often than people think. Natural and man-made disasters also occur on a regular basis. Yet since 1900 “the stock market” has provided close to an 8% annualized return over the past 111 years. Those who benefited the most from the scary markets of the past were those people that took advantage of those down markets to invest their money.

With millions of people across the world gaining ground financially they are buying everything from Pepsi to toilet paper and somebody has to make and sell those products. The outlook for global businesses seems very bright as does the outlook for those that invest in these businesses. You just can’t look at these opportunities through a short-term lens. We don’t claim to have any idea when the employment picture in the US will improve, we hope soon. We have no idea how long it will take the Eurozone countries to work out their debt problems. We hope to see progress in the near-term but suspect the problem will take at least a few years to work out with more market volatility in the future as a likely result. But, history also tells us that however we get there, things will get resolved, economies will grow once again and very likely, those that made good investments when prices were low will be rewarded.

As for what you should do? Age, financial circumstances and your ability to stomach market volatility all come into play. Even if you feel like you have to keep your current account balance “safely” tucked away in a money market fund if you are not going to be drawing on your retirement savings until 2020 or later consider investing your new contributions to your 401(k) in one or more to the stock oriented funds in the plan.

Risk can be defined as the permanent loss of capital – which is not the same as month-to-month fluctuations in the price of a share of stock in a given company. Price is what you pay – value is what you get. Consider that the money that has been “safely” tucked away in money market funds over the past few years has earned virtually nothing while the price of oil has doubled. That is loss of purchasing power – a permanent loss of capital.