Nine years ago, I visited my grandmother in the hospital.
She was dealing with post-surgery complications after having part of her lung removed due to lung cancer. As you can imagine, the process was long, hard and painful. And she struggled to breathe even when sitting still, let alone walking.
As we were sitting there, the doctor came by. When he asked her if she was feeling any better, I wasn’t exactly surprised when she shook her head no.
But the doctor was surprised.
Between breaths, my grandmother explained all the people around her had been getting better and checking out of the hospital. She was not feeling better. She was struggling.
But then the doctor asked her to think back a few weeks, to the day after her surgery.
If she looked only at that day, and not the people around her, did she feel better?
This time she said yes.
He explained that when we try to determine whether we’ve improved, we will often compare ourselves to the people around us or to how we felt the day before or recently.
But progress can sometimes be so gradual it can’t be measured that way.
Progress should only be measured over a length of time, he said, and only against the place you yourself have come from.
Here’s a snapshot of how the MSCI ACWI index, which tracks large and mid-cap stocks in developed and emerging markets, is doing so far in 2022.
Most people would agree that if a doctor was to ask the MSCI ACWI how it was doing, it would say “not so well.”
But here’s a snapshot of the index over all time.
By ‘zooming out’ and looking at the bigger picture, you can see that the MSCI ACWI has had many, many moments that would have shaken the soul.
But overall, it has come a long way.
When you’re brand new to investing, and you don’t have a ‘journey’ to look back on, it’s hard. It looks like you’re moving backwards. And like I wrote last week, we know that isn’t easy.
But in a few years — whether that’s two or five or ten — when there’s another correction, you’ll realise you have an investing journey to ‘zoom out’ on and you might just realise that actually, you’ve come a very long way from where you started.
Like we always say, with investing, past performance isn’t an indicator of future performance, but stock markets do tend to rise over time.
So, remember what the doctor said to my grandmother: Progress can sometimes be so gradual it can’t be felt, and that’s why progress should only be measured over a length of time, and only against the place you yourself have come from.
