The Resilience of Capitalism

Capitalism has proven to be quite resilient. Figure 9-3 shows the growth of a dollar in various indexes over the course of 90 years, marked with 16 major news events listed in Figure 9-4. While the major events had large short-term impacts on market prices, they proved to be largely inconsequential in the long term as the market marched ahead. Despite several setbacks, capitalism has not only persevered, but thrived. This long-term history of quality data provides a useful tool for investors to construct risk appropriate portfolios.

Figure 9-3

Growth_of_a_Dollar_for_US_Indexes_Over_the_Long_term

Figure 9-4

Market_Turmoil_and_the_Dow_Jones_Industrial_Average
Step 9CapitalismGrowth of a DollarLong-Term History