The Resilience of Capitalism

Capitalism has proven to be resilient. Figure 9-3 shows the growth of a dollar in various indexes over the course of 86 years, marked with 15 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 the most useful tool for investors to construct risk appropriate portfolios.

Figure 9-3

Figure 9-4

Step 9CapitalismGrowth of a DollarLong-Term History