Due to the uncertainty surrounding the COVID-19 pandemic, a drop in oil prices, and fears of a recession, the early months of 2020 were a roller coaster for the stock market. But as Dave Ramsey says, you only get hurt on a roller coaster if you jump off half-way through the ride.

I remained on that roller coaster and didn’t change any of my 401(k) positions, so I didn’t realize any losses. Therefore, I didn’t lose anything during the “COVID market plunge” of early 2020.

2020 Through September

As illustrated by the graph below, my 401(k) was down -27% between mid-February and mid-March. However, year-to-date through early September, all COVID-related losses recovered with a +5.7% year-to-date rate of return.

Latest 12 Months

Taking a broader view, my rate of return for the past 12 months is +19.1%.

Latest 24 Months

Looking back even further, my rate of return for the latest 24 months is +18.6%.

Key Takeaways

Invest Consistently. Once out of debt with a 6-month emergency fund, invest 15% into retirement. The number one indicator of those who retire wealthy isn’t rate of return, but rather, their savings rate.
Be Patient. Since the S&P’s inception in 1923, average yearly returns have ranged between 9.7% to 12%. Even if there are some rocky years ahead, 80 years of history indicate patience is prudent when investing.
Seek Opportunity. Those who invested their extra cash in the bank during the time of this “COVID market dip” made money. As Warren Buffet once said, investors should “be fearful when others are greedy, and greedy when others are fearful.”

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