Duncan Lamont, Head of the Schroders Global Investment Strategy Research Department, pointed out that from a historical perspective, it is not advisable for investors to hastily sell stocks when panic is high, as this is usually not a wise decision. Like all investments, past performance may not necessarily be a guide to future investment performance, but based on previous experiences, investing in the stock market during times of market panic like now may actually be better than imagined. An analysis of nearly 100 years of US stock market data found that if the investment period is only one month, there will be a 40% chance of experiencing losses after adjusting for inflation. However, if the investment period is longer, the probability of realizing returns will significantly increase. For a 12-month investment period, there will be a 30% chance of experiencing losses. The key point is that 12 months is still considered short-term for stock market investments. Investors generally need to invest for a longer period to benefit. Calculated for a 5-year investment period, the time of incurring losses will decrease to 22%. For a 10-year investment period, the time of incurring losses is 13%. According to the analysis, when the investment period is 20 years, the probability of experiencing losses in stock investments after adjusting for inflation is 0%. Although investors cannot completely rule out the possibility of losses in long-term investments, if this situation does occur, investors will obviously feel significant distress, but this is also a very rare occurrence. While cash may seem safer, the possibility of its value being eroded by inflation is higher. And, all cash savers should be aware that recent experiences are especially challenging. Looking at the situation of global stock markets represented by the MSCI World Index, in 52 historical years before 2024, there were 30 years with declines of over 10%. In the past 10 years, the years with such significant declines include 2015, 2016, 2018, 2020, and 2022. Looking back over the past 52 years, the stock market has experienced 13 significant drops of over 20%, on average occurring once every 6 years. However, if there is another major drop in 2024, it would be the 3rd occurrence in just a short span of 4 years, with the previous two occurring in 2020 and 2022. Despite occasional highs and lows in the market, the US stock market has still achieved a strong average annual return over these 52 years. The short-term risk of losses is the cost of obtaining long-term returns from stock investments. Schroders Global Investment suggests that although financial markets have not yet fallen too much, increased volatility and the risk of further declines still exist. If this situation occurs, it will be even more difficult to avoid being influenced by emotions. Investors may choose to give up stocks and switch to cash. However, research shows that this has always been one of the worst financial decisions investors can make, and it is almost certain that it will take them a long time to make up for the losses. For example, if investors sold all their stocks and switched to cash after the first 25% drop in the stock market during the Great Depression in 1929, they would have to wait until 1963 to recover their losses. In contrast, if investors continued to invest in stocks, they would have achieved breakeven in early 1945. Please note that during this downturn, the stock market eventually dropped by over 80%. Therefore, while switching to cash may potentially help investors avoid the most severe losses during a downturn, it is still the worst long-term investment strategy to date. Recently, the fear index of the stock market (VIX index) has been continuously rising, mainly due to investor concerns about the weak US economy. The VIX index reflects the market's expectation of the volatility level of the S&P 500 index in the next 30 days. The escalating tensions between Russia and Ukraine in May 2022 also saw the VIX index soar to high levels. However, from a historical perspective, it is not advisable for investors to hastily sell stocks when panic is high, as this is usually not a wise decision. Schroders Global Investment has studied a switching strategy, where when the VIX index is above 30, all stocks (S&P 500 index) are sold and converted to cash; when the VIX index falls below 30, stocks are repurchased. The annualized return rate of this switching strategy is 74% (without considering any costs), but its performance is still not as good as consistently maintaining a stock investment strategy, which has an annualized return rate of 99% (also without considering any costs). If an investor had invested $100 in January 1990 and held the portfolio continuously, its value would now be over 25 times that of the switching strategy portfolio. Like all investments, past performance may not necessarily be a guide to future investment performance, but based on previous experiences, in times of market panic like now, stock market investments may actually be better than imagined.