The Stock Market. Big and Scary? Nope. We will ignore the noise

The ‘don’t blame me’ blurb: I am not a financial advisor, portfolio manager, or accountant. This is not tax or investment advice; it’s information to get you going. Please consult your trusty professional and do your due diligence. Carry-on!

Updated: March 11, 2025

Why are we talking about the stock market?

The stock market may appear daunting, complicated, and risky. However, investing long-term over 20 to 30 years simply and systematically is easy. It can earn us $1 million+. We need to look at the forest, not the trees.

To invest, you don’t need to be an expert, and it isn’t a huge time suck. You only need around 20 minutes every three months to invest using a Three-Fund Portfolio or a single Vanguard Target Date Fund.

Why does the stock market feel big and scary?

👉 No one teaches us about money and investing in school.
👉 Media reporting breathlessly on short-term market swings. They don’t matter in the long term.
👉 Way too much unnecessary jargon.
👉 Wall Street and the financial industry don’t want you to know it takes hours, not years, to understand how to invest.
👉 Stock market crashes - They’re scary, but once you understand them, not so much. More below.

For long-term investors, it’s not a lose-it-all risk — We need to ignore the noise.

The average return of the S&P 500 since 1945 has an average gain of 10-11% every year.
With regular contributions every quarter using a Target Date Fund or three ETFs in the stock market, it’s easy to make $1 million+ in the i401k over your career.
Buying individual companies is risky. Single companies are very unpredictable, and almost no one can always pick winners. People think they can because they’re convinced by parts of Wall Street, the financial industry, and some financial media who profit from you trading and buying products or services.
We buy low-cost index ETFs or a single fund that contains thousands of U.S. and international companies plus bonds. They don’t go broke, they don’t have scandals, and they give us diversification. It’s called the Three-Fund Portfolio. Read the detailed post here.
- SCHB - Schwab U.S. Broad Market: Owns pieces of virtually every major U.S. company
- SCHF - Schwab International Equity: Provides exposure to global companies
- SCHZ - Schwab U.S. Aggregate Bond: Offers stability and income
Psychology is a big part of being a good investor. That means being calm and knowledgeable when the market goes haywire and drops. The whole point of investing in the stock market for chill-tirement is having money for the future. Freedom, happiness, and security.

The stock market in a nutshell

On average, the US stock market goes up 2/3 of the time and down 1/3. Let that one sink in for a second. We’re bombarded with all of the daily reporting and drama of market moves, but it turns out that the market goes up most of the time. It has an upward bias and averages 10-11% yearly over long periods.
Our Three-Fund Portfolio’s growth (U.S. stocks, international stocks, and U.S. bonds) gains an average of 7-8% a year. I’m talking over 20 to 30 years. In some years, the portfolio will soar like it did in 2024. In other years, it will drop in value. It averages out long-term to predictable growth and will make you rich. Why is the gain 7-8% LESS than the S&P 500’s average of 10-11%? It is more diversified and includes international stocks and U.S. bonds.
No one, and I mean no one, can predict what the market will do next. That’s why in our i401k, we keep buying the ETF/fund every quarter, no matter what. We are getting an average cost over the long term. This is called ‘dollar cost averaging.’ When you hear or read some Wall Street analyst or pundit proclaim they know the future, grin and realize they don’t. In 2023, pundits and many economists said we would have a recession. We didn’t, and the U.S. market increased by 26%.
It’s NORMAL for the stock market to drop, even crash sometimes. As a result, your investment account balance will also fall. A good investor is comfortable with this, knowing it will rebound, but it could take time. It will still be uncomfortable, but we must look long-term and relax. When this happens, we keep buying our fund or ETFs at lower prices.
Never sell during a scary time. Never. Those who do always lose long-term. This is the classic mistake people make. They sell after the market drops when they’re scared. Then they wait for years on the sidelines until everything seems rosy, only buy in again once the market has recovered. They miss all of the gains. This is selling low and buying high. Never sell when you’re scared; at some point, you will be.
You have not lost money when your account drops in value. I know that sounds strange, but hear me out. If your i401k went from $300,000 to $250,000 during a downturn you still own the shares of the fund or ETFs. They have thousands of companies inside them; their price will rebound. You only actually lose money during a falling market if you sell. The value may have gone down, but you did not lock in a loss by selling. Hold fast. Buy more.
When we buy during a down period in the market, our ETFs and fund is on sale. Their price has dropped, and we get more shares than we would when the market and their price were up. Who doesn't love a sale?! We buy every quarter (every three months) no matter what in the i401k. Famous investor Warren Buffet once said, “Be greedy when others are fearful, and fearful when others are greedy.”
Compare your i401k’s portfolio to the market. If your portfolio went up +2% one year but the market (use SCHB or VTI as the market) dropped -3% that year, you did well. Don’t look at performance in isolation. If the market fell -15% and your portfolio only dropped -7%, that’s a win. Some years, your portfolio will end in negative territory for that year. That’s ok.
The stock market is not the economy. It is forward-looking and does not always reflect the health of the economy. For example, the market may rise while the economy is still in bad shape. It seems crazy, right? This is because investors can see the light at the end of the tunnel or the reverse. They could see trouble coming, and the market will drop.
Buy on a schedule no matter what the market is doing. The first of the month, or the first day of the quarter, is great. This is called ‘dollar-cost averaging.’ It means we get an average price for the year as we buy during the ups and downs. More importantly, it takes our emotions out of the mix. The market is crashing? Too bad, it’s the first, so we are buying. Guess what? You just purchased cheaper shares while others freaked out and sold.
Emotion: great in relationships but unhelpful with investing. Don’t make decisions based on fear, greed, or confusion. Hold Fast. Stick to the plan.

Traders vs Investors

I bet you can’t tell which one is the Trader and which is the Investor. Ain’t playing with AI images fun?

The market is used by sensible types like us looking for long-term, steady gains, but also by a bunch of cowboys running around doing stupid shit and at the same time calling themselves ‘the smart money.’ Some of the biggest headlines are caused by traders blowing themselves up with risky bets. Trader or Investor; what’s the difference?

The Trader: Someone who buys and sells in the market in the short/medium term to take advantage of price movements, known as ‘market timing.’ This is risky and can often end in disaster. Time and time again, it’s been shown that this approach does not work. Price changes can never be accurately predicted. I mean, the group on Reddit most famous for meme stock trading is called ‘ Wall Street Bets,’ kinda obvious what they’re doing. Gambling.

The Investor: Investors have a longer-term focus and strategy. They are looking for steady gains and believe in the investments they purchase. They use time to become millionaires, not outrageous bets. Averaging 7-9% a year will make you millions over 20-30 years.

If you haven’t already, head to the i401k page and kick that off. It’s a massive tax deduction and a real wealth builder for freelancers and single-person businesses.

The wise, ye olde investor:

“It’s TIME in the market that matters, not timing the market.”

Stock Market Crashes

Let’s talk about the uncomfortable moments.

I’m not talking about when your Mom walks in on you and your first crush; I mean when the stock market crashes.

They happen, and they make you feel kinda horrendous. Personally, I feel like I’m about to puke in my mouth a little. However, a good investor is ready for a drop and is calm when it happens, and it will happen.

A ‘correction’ is a 10% drop; they happen all the time. The market gets a little too pricey and then drops as investors get spooked. Why does it drop? They all sell at the same time.
A ‘market crash’ is a 20% or more drop in a short period, a day or a few weeks. They happen regularly, so don’t be surprised. It could be a war, a big bank defaulting, or a killer virus. It WILL happen to you at some point, but it’s ok. The market will recover; meanwhile, we are buying cheaper ETF/fund shares. Examples of crashes and why they don’t matter long term are below.
Major market declines more than 20% since 1945: 1946, 1961, 1968, 1973, 1980,1987, 2000, 2008, 2018, 2020. Yet with all those declines, the average gain in the market is still 10-11% every year.

If you’re nearing retirement (within 5-6 years), talk to a Certified Financial Planner (CFP) and organize a plan. Why? If you’re nearing retirement, you will soon be moving to the spending stage, where you begin to use your investments as an income source. In this case, you can’t wait years for the market to recover. You will most likely need to own more bonds or use other techniques for a secure income (along with social security and other assets you own, like real estate). I prefer an advisor who charges for their advice up front, an ‘advice-only advisor’ who creates a plan for you.

2008-2009 Financial Crisis Crash - a 50% market crash

Talk about pukey, Hank Paulson, Secretary of The Treasury at the time, wrote later that he dry heaved from the stress after a long night of meetings on the Hill trying to stave off total financial collapse; read about it here.

Above is a graph of VTI—Vanguard Total Stock Market ETF. It has around the top 4,000 US companies inside it. VTI dropped from $70 to around $35. Yes, it fell around 50%. It was total brown trousers time.

If your i401k had a $150,000 balance, it probably dropped by 30-40% to $90,000. It would not have dropped the entire 50% because you also owned the international and bond ETFs that dropped far less.

I know this doesn't look good, but keep reading.

2020 The Covid Crash - a 35% crash

Eleven years later, the world was ending again for a different reason, a truly terrifying one, as people were dying. VTI dropped from $170 to under $115, a 35% drop.

ME: In March 2020, I had money from selling a house and made a plan to buy more of our ETFs/funds every Monday morning for eight weeks during the crash. The plan was to take advantage of the price drop, buying every Monday for eight weeks to get a low average price during the market turmoil.

The weekly buying on Monday took my emotions out of the decision-making process because it was scary. With a crashing market, people dying, and society locked down, some Mondays, it seemed insane to buy, but I kept going. Emotion is great for relationships and bad for investing. Sorry, Honey!

As we know now, the market has rebounded faster than anyone would have guessed and has gone on to make massive gains. I didn’t think it would rebound that fast, but I did know it would over time.

The Big Picture

Now, let’s widen our view and look at VTI from 2002 to 2024. See the two red arrows? The stomach-churning stock market crashes of 2008-09 and 2020 now look like little blips along the way. At the time, they were nasty, and you would have felt awful, but looking at them over 20 years, they were buying opportunities. Be scared, sure, but keep buying; never sell.

As sensible investors, we need to stay calm and look long-term. From 2002 to 2024, VTI made a 361% gain. If you had $300,000 invested in 2002 (and did not add any more funds or re-invest dividends), it would be worth around $1.38 million in 2024.

When the market crashes and everyone, including those blabbing on TV, panic, you know better.

Think in ten, twenty, thirty-year time-frames. Not just a few years.

The experienced investors take on buying during a crash:

“A good signal that you’re on the right track is wanting to throw up.”

Could it all go horribly wrong?

A war the size of World War II would cause a massive disruption to a stock portfolio and i401k, but that might be the least of our problems. If the U.S. defaulted on its debt (the usual suspects in Congress messing with the debt ceiling), it would also create a total mess. Events like this could affect our goal of a 7%-8% annualized gain.

The stock market has also had periods when it went sideways, such as 1968-77. The annualized gain was only 3.4%, a terrible period for investors.

Yes, the market has had periods of sucking badly, but long term, it has been a total winner.

What are the alternatives to the stock market — Gold? Cash? Crypto?

Cash using a money market fund or gold and Crypto ETFs are considered alternatives to stocks. Unfortunately, cash won’t make much money over the long term, as shown below. In Crypto’s case, who the hell knows? Physical real estate is another alternative, but it is tricky to own inside an i401k. Outside of an i401k, real estate is potentially a good investment in a balanced total investment portfolio.

**The value of $100 invested in 1928 by 2022 would equal*:**

S&P 500 (stocks) including dividends reinvested - $100 became $624,534
Gold - $100 became $8,866
Cash - $100 became $2,140 (in a bank, earning interest.)
Crypto - Who knows with this one? It could go to zero, or you could get rich, maybe? Some advisors have clients add crypto like Bitcoin to their accounts for diversification (stocks may drop for a while, while crypto may go up, for example). Personally, I’m not interested in crypto. Paraphrasing Warren Buffett, “I’m not going to buy an asset that is solely based on what the next guy will pay me for it.”

*Source NYU’s Aswath Damodaran

The point here? Being in the stock market long-term eats gold and cash’s lunch. Making a steady 7-8% a year is the way to go.

Wrapping up

Don’t listen to the doomsayers and conspiracy nuts talking about the end of the world, the gold standard, or the end of the U.S. dollar as the world’s reserve currency.

Keep it simple and look at the stock market's historic long-term gains. Yes, there will be stomach-churning drops. Just hold fast and play the long game.

Prof G (Scott Galloway), Professor of Marketing, NYU Stern:

“The good news is, I know how to get you rich. The bad news is the answer is slowly.”

Want more?

Take a read of CFA, Ben Carlson’s (Certified Financial Advisor) post on Why The Stock Market is Not a Casino. Ben’s blog is interesting, no-bull, and called ‘A Wealth of Common Sense’ for a reason.

CNBC reported here how people are coming back to ‘lazy investing.’ Yes, in 2023, we crushed it. We did not market time and sell in the face of doom and gloom predictions about a coming recession. Instead, we kept buying every quarter as we always do. SCHB - U.S. Broad Market gained 24%. We captured all those gains because we stayed in and kept buying.

*¹ WSJ Intelligent Investor article “What Our Brains Know About Stocks—but Won’t Tell Us”

The Stock Market. Big and Scary? Nope - It Creates Wealth In The Background.

Why are we talking about the stock market?

The stock market in a nutshell

Traders vs Investors

Check this out:

Stock Market Crashes

Let’s talk about the uncomfortable moments.

Examples of Recent Stock Market Crashes and
The Big Picture