by Charles Cheng, CFA

 

 

News stories or historical articles, often talk about the price of something in the past, referencing the fact that whatever nominal amount it cost back then would be a much larger amount today due to inflation. For example, due to the compounding effects of inflation, the purchasing power of the U.S. dollar has significantly decreased in the 30 years since 1995. A dollar in 1995 was worth more than a dollar today, meaning it could buy a greater amount of goods and services. For example, what cost $100 in 1995 would require approximately $212 today to purchase the same items.

新聞報導或歷史文章經常會提到某樣東西在過去的價格，並指出當年的名目金額由於通貨膨脹在今天將是一個高得多的數額。　舉例來說，由於通貨膨脹的複利效應，美元的購買力自1995年以來的30年間已顯著下降。　1995年的一美元比今天的一美元更有價值，意味著它可以購買更多的商品和服務。　例如，1995年價值100美元的東西，今天大約需要212美元才能購買相同的物品。

 

Thinking in these terms can also be good practice for investments. Invested in stocks and bonds for instance, the dollar amount invested over this time would far exceed the inflation rate. While money invested in USD bonds over that time would be close to three times larger in 2025 versus 1995, that same amount would be worth over nine times that amount if invested in global stocks.  In other words, 100 US dollars invested (with dividends reinvested) in the MSCI World All Country Index in July 1995 would be worth 960 dollars in July 2025.

以這種方式思考對於投資也是一種很好的練習 (反思)。　例如，若在過去這段時間將資金投資於股票和債券，其增長金額將遠遠超過通貨膨脹率。　在1995年至2025年間，若將資金投資於美元債券，其價值將增長接近三倍；但若投資於全球股票，其價值將增長超過九倍。　換句話說，若於1995年7月將100美元（含股息再投資）投資於MSCI全球所有國家指數（MSCI World All Country Index），其在2025年7月將價值960美元。

 

Of course, securities, and especially stocks, are risky, so people are often hesitant to put a significant portion of their wealth into the market. But looking at the math above, you can see that it’s far riskier to put your money under the mattress or in low yielding bank accounts over the long term, where you would be left with nine times less purchasing power versus investing in stocks. The opportunity cost is astounding.

當然，證券，尤其是股票，具有風險，因此人們往往不願將大部分財富投入股票市場。　但看看上述的數學計算，你會發現，從長遠來看，把錢放在床墊下或低收益的銀行帳戶裡風險要大得多，因為你的購買力將會減少九倍，遠不如投資股票。　這個機會成本是驚人的。

 

There are better times than others to enter financial markets, with the worst times being at a market peak that is followed by a severe crash.  But even if you were the world’s unluckiest investor in terms of timing, you would still come out ahead given enough time invested in the broad indexes. Below is a table of the ten worst times to invest in the MSCI AWCI Index in the past 30 years and the subsequent returns (Note: in price terms. If considering reinvestment, returns can be over twice as high).

進入金融市場講的時機有好有壞，最糟糕的時機是市場達到高峰後隨之而來的大幅崩盤。　但即使你是世界上運氣最差的投資者，只要你將資金長期投入大盤指數，你仍然會獲利。　下表列出了MSCI ACWI指數30年來10個最糟糕投資時機以及隨後的報酬率（注意：此為價格報酬，若考慮股息再投資，報酬可超過兩倍）。

 

Price returns for MSCI ACWI Index – MSCI ACWI指數價格報酬率

Peak Date	Event Context	Subsequent Drawdown (%)	1M Return (%)	6M Return (%)	1Y Return (%)	5Y Return (%)	10Y Return (%)	20Y Return (%)
1997-07-31	Pre-Asian Financial Crisis	-7.90%	-7.20%	1.50%	6.80%	-12.60%	-1.10%	147.10%
1998-07-31	Pre-Russian Default & LTCM Crisis	-14.10%	-14.20%	5.50%	15.20%	-12.40%	18.00%	141.00%
2000-03-31	Dot-Com Bubble Peak	-48.40%	-4.60%	-9.60%	-26.50%	-18.60%	-10.80%	28.40%
2001-05-31	Dot-Com Bear Market Rally	-33.50%	-3.20%	-10.30%	-21.40%	4.80%	68.30%	240.20%
2007-10-31	Pre-Global Financial Crisis	-56.20%	-4.60%	-10.40%	-44.80%	-23.00%	16.10%
2011-04-29	Pre-US Debt Downgrade/EU Crisis	-21.40%	-2.50%	-12.50%	-12.10%	61.30%	105.30%
2015-04-30	Pre-China Devaluation Scare	-14.80%	-0.40%	1.10%	-8.70%	64.00%
2018-09-28	Pre-Fed Tightening Sell-off	-13.10%	-7.60%	-7.30%	-0.70%	62.70%
2020-01-31	Pre-COVID-19 Crash	-29.80%	-8.20%	-0.70%	14.90%
2021-12-31	Pre-Inflation/Rate Hike Bear Market	-26.70%	-5.00%	-21.00%	-19.80%

 

Undoubtedly investing at any of these times would be painful for any investor. But if you look at the 5-year time horizons, half of those returns are already positive, and by ten years most are.  And the subsequent 20-year periods have all been positive so far, sometimes significantly so.

毫無疑問，在上述任何一個時間點進行投資對任何投資者來說都是痛苦的。但如果你看五年期的報酬率，其中一半已經是正數，而到了十年期，大部分已成為正數。　並且，隨後的20年期間的回報率迄今為止都是正數，有時甚至非常可觀。

 

So the decision to be invested in markets becomes simple, once you consider your time horizon and the amount of price declines you can bear. Yes, it’s hard to tell when the market will suddenly crash, but that should not be a deterrent to being invested, no matter how unlucky you may or may not be.

所以，一旦你考慮好了投資時間跨度和你可以承受的價格下跌幅度，將資金投入市場的決定就變得簡單了。　是的，很難說市場何時會突然崩盤，但這不應該成為你投資的阻礙，無論你的運氣好亦或壞。

 

 

This article reflects the personal views of the author and not any firm’s and should not be viewed as an investment recommendation.

 

 

 

 

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