how does inherent market risk factor into the equation? “We send this message to our customers: that every downturn in history has ended in an upturn,” Kerner responded on Wednesday. Acorns sent out the same sentiment during an especially tough period in the markets almost two years ago. Acorns does not sell crypto trading, but the industry may be involved in Kerner’s comments.
While in the last hundred years or so, the present representation of the stock market has consistently bounced back, not everyone rebounds all the time. The statement by Kerner should not take into account the numerous individual assets and enterprises that have died throughout history. Many crypto projects have died out on a relatively shorter time scale.
In general, proven economies have shown a degree of resilience, however. A recent example is Bitcoin. The asset, despite all its downturns, refused to die ad it’s gradually rising. Back in March, when COVID-19 news took over the headlines, crypto and mainstream stocks saw a significant drop. All have since bounced around, displaying resilience.
“As usual, the world was coming to an end again,” Kerner said referencing people’s mindset at the time. He recalls March 18, which happened after a series of red days for the Dow, as especially problematic for mainstream finance. He chose the time to spend heavily in traditional, mainstream markets.
“I was panicked too. I mean, that was a scary moment. But I remembered in my head, ‘Every downturn ends in an upturn, every downturn ends in an upturn, and if the world is really coming to an end, it doesn’t matter anyway.’ So, I just put in a whole bunch of money that day.”
Looking at the past can sometimes help spur insights on the future. Kerner explained:
“Just have faith that history is usually a predictor of the future. Not always, but it usually is, and if history is usually a predictor, then things are going to end up in a better place than they are when it’s really bad. So, just stick with it.”