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Share prices see-saw: all part of riding the FTSE 100 roller coaster

Today, I watched as the FTSE 100 - and the share price of many of its constituents - fell, rose, and finish where it started...

The FTSE 100 sank to a five-month low earlier — plunging to 6,791 just before 9am — with the share price of a large volume of its constituents nose-diving

Having closed on Friday at 6,987.14, as I write (at 2pm on Monday) it now stands at… 6,987.18.

I chose to highlight these three words in the opening paragraph as examples of fear-mongering rhetoric that, here at The Motley Fool, we strive to avoid.

Instead, we aim to be the calm and optimistic voice amid any chaos when it comes to the stock market.

Of course, this takes nothing away from many of the underlying reasons behind the Footsie’s turbulence right now. What’s going on in Eastern Europe is unimaginably awful, and like many I’m glued to news and updates from journalists far more knowledgeable about the situation than I am.

Where I hope to provide value to private investors is to simply send a reminder that, yes, the nature of the stock market is that it does have peaks and troughs.

We saw that in the first six hours of today.

But what’s so important is the ability to block out a lot of the noise — these emotive words that cause us to worry about our portfolios — and to take a step back.

And then another one.

Over one year, the FTSE 100 is currently up 4%.

In fact, keep going — zoom out enough, and you’ll see what I want you to.

That since its inception in 1984, the index is up by more than 500%!

However, let’s look across the Atlantic to see if we’re an anomaly. 

Year to date, the S&P 500 has cratered by almost 10%…

… but over the past 12 months, it’s up by over 13%.

Across the last five years? +82.5% as I type.

And almost 4,000% — Four. Thousand. Per. Cent. — since 1982.

I really can’t say it enough, so once again I’ll shout it loud enough for the people at the back.

Historically, the stock market goes up.

Don’t be fooled by any so-called market commentators who are trying to grab your attention by highlighting intra-day drops in share prices.

Please (please) instead, do be Foolish — paying special attention to the capital F! — and take a long-term view. 

In all honesty, I haven’t looked at my investing portfolio these past few weeks. I know there will be some ‘paper losses’ compared to when I did last check in.

But I have faith in the reasons I bought into these companies — not just tickers on an exchange, but actual businesses.

And because the research behind these stock picks uncovered growth potential that perhaps the market hadn’t priced into the shares yet, the investment rationale is largely intact.

I remain resolute that the current choppy market is being made seemingly worse by short-term traders.

Yet I’m a long-term investor. So I’m going to close my eyes and ears to any hype-driven oratory on why we should sell all our shares and buy whatever’s being touted as the ‘right’ safe-haven investment instead.

I hope you can, too!

The post Share prices see-saw: all part of riding the FTSE 100 roller coaster appeared first on The Motley Fool UK.

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© 2022 The Daily Encrypt. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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