--- title: "The Holy Grail of Misconceptions: Let’s Talk About Losing Money" description: Overcome the fear of losing money by understanding stock market fluctuations, long-term growth, and the power of time for smarter investing decisions. image: https://beckbode.com/hubfs/Untitled%20(796%20x%20614%20px)%20(Blog%20Banner).png --- # The Holy Grail of Misconceptions: Let’s Talk About Losing Money [ by ![Benjamin Beck, CFP®](https://beckbode.com/hubfs/Benjamin%20Beck%2c%20C.png) Benjamin Beck, CFP®](https://beckbode.com/blog/author/benjamin-beck-) | March 7, 2025 Allow me to set the stage. A few weeks ago, I found myself in what can only be described as aFidelity-induced fever dream. A new family had recently moved into our neighborhood, and one day, I noticed the dad walking his two golden retrievers near my house. I was outside throwingthe football with Griffin, so naturally, I struck up a conversation. It didn’t take long for him to casually drop that he was some sort of managing partner at Fidelity. Insert eye roll. Naturally, I welcomed him to the neighborhood, and once I learned that he’s apparently some sort of “big deal” in fixed income over at Fidelity, I couldn’t resist pushing the conversation further in that direction. I mean, he brought up his domain in the only way I would expect somebody in that position to do so—by delivering what can only be described as a monologue about the glory of fixed income and the unmatched brilliance of Fidelity. It was less a conversation and more of a declaration, the kind where you nod politely while wondering if he’s just reciting his resume verbatim. After all, he seemed determined to make sure I fully understood just how important he—and bonds—were in the grand financial universe. So there we are, standing at the end of my driveway, in front of the House that Mallach Built. And he not-so-casually drops, “Well, who do you use for your fixed income allocation?” Dramatic pause. Now, because you all know me, you know exactly where this conversation is headed. Let me tell you—when he heard even a snippet of OUR philosophy on the subject, the look he gave me was priceless. Imagine, if you will, the sheer disbelief of someone who just realized they drank expired milk. His expression screamed, This guy’s either joking or deeply confused. Attempting to recover, he stammered, “Well…what do you say to people who don’t want to lose money?” And there it was. The holy grail of investor misconceptions. Perhaps picking up on my silent, quizzical look back at him, he again tried to save himself: “What I mean is…the big swings. You can’t tell me you’re putting 100% of your clients’ money in equities?” Now, I wish I had taken a photo of his face. Besides fighting the urge to correct another blatant misconception—that we don’t have “customers,” we have “clients”—I also had to remind myself that this kind of thinking is all too common with these “big-time” portfolio managers who never consider the end user. Maybe that’s what I’ll send him for Christmas: a framed picture of his expression. But here’s the thing: his reaction highlights something so common, so human, that I decided it deserves a bit more of a discussion here. ## The Misunderstood Fear of Losing Money The idea of "losing money" in the stock market is like a financial urban legend. It’s the Bigfoot of investing. You hear about it everywhere, but when you dig into the evidence…not so much.And yet, nothing gets my attention faster than this phrase: “I don’t want to lose money.” It’s another reminder of just how deeply this misconception runs. At face value, it sounds logical—almost noble. Who does want to lose money? But here’s where the plot twist comes in: this statement isn’t just a misunderstanding—it’s an entire re-education opportunity. Here’s the deal: If you invest in mainstream equities, you will experience temporary losses. I don’t sugarcoat that. But the word "temporary" is the key. Let me hit you with some numbers: - Since 1980, the S&P 500 has experienced an average annual peak-to-trough drawdown of 14%. - About one in five years, that drawdown deepens to 30%. - And on two occasions—2000-2002 and 2007-2009—the S&P 500 got cut in half. Now, if I stop there, you’d be justified in asking, “Why on earth would anyone invest in this madness?” But here’s the kicker: During this same period, the S&P 500 went from 108 in 1980 to 3,839 in 2022, producing an average annual return of 11.5%. That’s the kind of growth that makes even Fidelity partners do a double take. ## Time: The Great Healer So how can these two wildly contradictory realities coexist? How can stocks both plunge and soar—and leave long-term investors smiling? The answer lies in the most underrated superpower of investing: time. Time doesn’t just heal wounds; it erases them and then throws a party. Take a look at history: - Three out of four one-year rolling periods in the S&P 500 show positive returns. - At three years, the odds jump to 84%. - By five years, it’s 88%. - And at ten years? You’re looking at a success rate of over 95%. This isn’t speculation. It’s not a motivational poster. It’s the hard data of nearly a century of market history. And yet, our clients struggle to grasp this because—let’s face it—human nature doesn’t exactly align with long-term thinking. Here’s an example: Imagine trying to explain turbulence to a first-time flyer. You can show themall the stats about how safe airplanes are and how incredibly normal turbulence is, but what they really need is a calm, trusted voice saying, “This is normal. We’re still heading to our destination.” What they don’t need is someone making a break for the exit row mid-flight, pulling the emergency handle because they felt a bump. And yet, when markets drop, that’s exactly how people behave—trying to abandon the very vehicle that’s carrying them to their goals. ## Empathy for the Not-Yet-Enlightened This is where empathy comes in. It’s easy to laugh at the fear of “losing money” when you’ve been steeped in decades of financial data. But for the average investor? Watching the market drop feels like someone stealing their wallet in broad daylight. Their fight-or-flight instinct kicks in, and logic flies out the window. Our job as advisors isn’t just to provide data; it’s to guide people through their own emotional storms. To explain that short-term declines aren’t losses—they’re just detours on the road to long-term growth. It’s about helping them understand that while the turbulence feels like chaos, the plane is still flying Let me put this another way for the CrossFitters in the room. You all know the workout Fran—it’s a terrible workout. It’s also a really fast workout. For those who’ve done it a million times, it’s uncomfortable but manageable. But for someone doing it for the first time? It’s overwhelming. It feels like absolute chaos. That’s the difference between experienced investors and first-timers. Empathy is about meeting people where they are. ## The Illusion of Risk Tolerance Now, let’s talk about one of the greatest myths in investing: risk tolerance. People don’t fear risk—they fear loss. And what they often fail to understand is this: Permanent loss in a diversified equity portfolio is virtually impossible for long-term investors. Even after market crashes that felt like financial Armageddon, investors who stayed the course recovered. Take Dr. Jeremy Siegel’s research. Since World War II, the longest it’s taken an S& P500 investor to recoup their losses—including dividends—is just over five years. That’s during some of the worst economic conditions imaginable. The real risk isn’t the market. It’s abandoning your strategy. It’s cashing out in a panic. In short: You don’t lose money in the market; you lose money by leaving the market. ## Closing: The Long Game Let me bring this full circle. My new Fidelity neighbor—who, by the way, is probablyreconsidering ever talking to me again—asked how I deal with clients who fear losing money. The answer is simple: I reframe the conversation. I help them understand that the equity market’s declines are like bad weather—temporary,frustrating, but ultimately survivable. The sunny days are always ahead. So next time someone tells me they’re afraid of losing money, I’ll smile, nod, and say, “Let’s talk about what you’re really afraid of—and how time can fix it.” Thanks for coming today. Now go enjoy your day. The market will be waiting for you when you return—just as unpredictable, and just as resilient.   [![Dancing with the Analysts](https://no-cache.hubspot.com/cta/default/20287694/interactive-187983238481.png) ](https://beckbode.com/hs/cta/wi/redirect?encryptedPayload=AVxigLKZvJ5f3OYSm278Nj9YfUaq9jacrEKMn1BbOu8oXMgIwSLht07HuQSVLoPHAnHh5c1ZHhOEPa4VJvw7Y2zzu0e0pYZp55Op57R5n1OFMzR7tA%2FOrnFtPBu9Ns6pYPxINlEHoVMNR3sH%2FhJdjw4HSIBJ7rpzGOrFQrVnb6um4%2Bw17S7dx3Zow5duTDz5ExGY5g7lky0R0GMp1eCLjETxvW4go4CM3zOqaYmRUyqcVCiv1AWXpPktMHF8Z%2Bb27dzAvFcHJJ92PpJDSvSZHpsTN7wkumhljwwRUKHO97a%2BHJYLi1kMs5upr95Q2GComWq2PF6zY53QWe9DgzCSStZvIq5LmC%2BkitTkZnZUMYA30v4msuPKWWeuc4oE%2BPDxma7bZyanlu8kpH3QOKlrDJrA16RdcBzL7MmeXN95z1xu9ovnmzClavuYadFlGIoIL8uIQHjBPewNmq8XcRKthb2M2mhxAFibQjtLeidRD33CCh5CV%2BvLDyAtGXuHgpOjW%2Fh8Vq4GSRPi2gF4ihjDq4r7fqWJbXTnRJK0PRN8FoG7W%2FsizuC4gL0UM5AkPw9DHae2BXJfQ068h%2BDb5%2FAluRjfwiFQM%2B7KCiYlAS4%2FfvLJCDM2bh1%2FsybzeMkLns3A%2Fx5cBPzY47dGF9tiFiNaoISn9hIHl1VUPC9M1HTkjJ2Se17yDhs%2F9HwHfcRuctSO6tBq%2FXApStjs6ZbpV7ixhR3kKgYcry6YfL%2F9OoHhJ0Vm964bzUpLdiwCFvtREFi6jUjMeIGhaS%2BS3LLBD7q0OxR74moxYU1SRtRm%2F6ebrtgGoIE9O4pqRTGytFxDGXv4HM9TOh7mOSJBpV2%2FN2vtDkYmxbW2BL8asn3l%2FkqGhalJXjEw4Hw3FqZnLeA13bC1e6IfB0pBrCAsq3ZE6jDwxR2Mrx70NGwSxX4QJjwu1Vf%2FWP9oR%2BOO2b9DUokEYwhgUzD48kypWYEEWUbjJiV7bMpbwlW%2FmqhV7ukRzIvQPKP5v3FKDX5vqR8eTw7pUTKqAn6nWxedoeKdGeHr%2B5Ou5yPQW0gIQEE4m4YIsHD2HDpxP0ZT3WHURtlRVHrzl1hPETmWMGqMlJ4OzvPekUym%2BFbxVm3VGT06nvmtWCOqaEAaNDKBLIK4rHGyURMh%2FqHCeWMYTx%2BHievUEYgLo3amEsLISawqApeD7jBlsB%2F6cpx3m0Mm1W0ut4cY3evzgdzpRDKG6WObatbhMVXVAe3Fi0naUXallLDhJbYkOjnsGu0%3D&webInteractiveContentId=187983238481&portalId=20287694) - [Tweet](https://twitter.com/share) ### Subscribe Now ### Popular Articles - [ Feeling Stuck? 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