Why Long-Term Investors Win: 7 Charts to Remember

Why Long-Term Investors Win: 7 Charts to Remember

With the recent market downturn and political turmoil, this is a great time to pause, reflect, and look at how markets have historically reacted to uncertainty. In our experience, stepping back and focusing on the bigger picture helps avoid emotional decision-making during turbulent times. 

This is by no means meant to downplay the challenges we're facing, but rather to offer a way to navigate some of the anxiety, if present. 

Let’s break it down with these 7 key charts!

Chart #1 – A Look Back at Trump’s 2018 Tariffs

Source: Edward Jones

How did the market react the last time Trump hit Canada with tariffs? Back in 2018, the Trump administration imposed tariffs on steel and aluminum imports until 2019 and yet, both the U.S. and Canadian markets barely flinched from a total return standpoint, returning 7% and 5% respectively. This all happened while central banks were actually hiking rates, creating a much tougher backdrop than what we see today (that is what explains most of the dip in the chart).

Chart #2 – “The US has been the best performer for the last few years. Should I invest there?”

Source: Hartford Funds

The U.S. market has been on fire for the past ~13 years compared to international investing, with the Magnificent 7 stealing the show. But it's worth remembering that diversification still matters. This chart highlights the cycles of outperformance between U.S. and International stocks. Historically, they tend to take turns leading the charge and almost form a consistent back and forth pattern. Could we be finally entering a turn of the tide?

Source: Koyfin

To put things into perspective, international developed stocks (as tracked by the SCHF ETF) are up +7.84% YTD, while the S&P 500’s SPY ETF is actually down -4.35% YTD (as of March 10, 2025).

Chart #3 – The Colour Quilt 

Source: Silicon Valley Bank

We now know that geographic diversification is great, but what about sector diversification? This chart highlights the wide range of returns across different asset classes each year. The top shows the best performers in given year, while the bottom shows the worst. If you look closely, there’s no real pattern - even if you try really hard to find one. Every year plays out differently, and this is exactly why spreading your investments across asset classes can lead to more consistent, reliable outcomes.

Chart #4 - Canadian Bulls and Bears, Eh?

Source: Edward Jones

This chart maps out all the bull (green) and bear (red) markets in the Canadian stock market since 1977. On average, bear markets last about 8 months with a typical decline of 31.5% on average, while bull markets run for of 3 years with a gain of 89% on average. When you zoom out, the bulls far outweigh the downturns. And keep in mind, this is just the Canadian market. Since we advocate for global diversification, the real-world experience is often less extreme than what this chart suggests.

Chart #5 – The market declines every year! You just may not realize it...

Source: Investing.com

Next up we have a timeless chart highlighting just how much the market (Toronto Stock Exchange in this case) can drop each year (red dot), versus where it ends up by year-end (blue bar). I always say that volatility is the price of admission for positive returns, and that you’ve got to endure some bumps along the way if you want to “enjoy the ride."

Chart #6 - Every Crisis Feels Unique, Until It’s Not

Source: RBC

There’s always another headline tempting you to sell. But again when we zoom out, we see that every ‘this time is different’ moment eventually passes, and the market pushes through (Toronto Stock Market displayed here). Don’t get caught up in the noise and stick to your plan!

Chart #7 - Other Political Shocks we can reflect on

Source: Koyfin

This new administration is drawing comparisons to Brexit, when the UK left the EU to regain control over its policies. After the 2016 Brexit vote, the UK stock market took a sharp dive (blue shaded box). However, the rebound was just as swift once the initial shock wore off. If tariffs are removed and sentiment shifts, history suggests this pullback could follow the same pattern. Political uncertainty often shakes markets in the short term, but it rarely changes their long-term trajectory. 

Closing Remarks

I hope these charts have given you a clearer, big-picture perspective on investing and reinforced the importance of staying the course. Markets will always have ups and downs, but your financial plan is built to withstand uncertainty. At the end of the day, we invest not to react to headlines, but to achieve your long-term goals, because that’s what truly matters.

Please remember that our team is always available to listen to your questions or concerns if you would like to discuss anything that is keeping you up at night, or if you just need a sounding board. 

This publication is for informational purposes only and shall not be construed to constitute any form of advice. The views expressed are those of the author alone. Opinions expressed are as of the date of this publication and are subject to change without notice and information has been compiled from sources believed to be reliable. This publication has been prepared for general circulation and without regard to the individual financial circumstances and objectives of persons who receive it. You should not act or rely on the information without seeking the advice of the appropriate professional.