Educated Investor
Market Insight: A Look Back to the Future
“The farther backward you can look, the farther [in the future] you are likely to see.” – Sir Winston Churchill (1874-1965)
What happened then?
1929-1936
1939-1944
1973-1976
1929 – Stock Market Crash
1932 – Great Depression
1939 – War Begins in Europe
(Germany attacks Poland)
1941 – Pearl Harbor Bombed /
U.S. Declares War on Japan and Germany
1973 – OPEC Oil Embargo
1974 – President Nixon Resigns
1975 – U.S. Economy in Recession
Source: S&P 500 Index
All the worrying in the past did not stop the bull markets from resurging.
NOT FDIC-INSURED
May Lose Value No Bank Guarantee
-14.7%
S&P 500 Index Total Yearly Returns
+37.2%
6
197
197
5
197
4
-26.5%
197
3
194
4
194
3
194
2
194
1
194
0
9
5
6
193
193
4
3
193
193
2
193
1
193
0
193
192
9
-43.3%
-11.6%
193
+47.7%
+25.9%
-0.4%
S&P 500 Index Total Yearly Returns
S&P 500 Index Total Yearly Returns
-8.4%
Educated Investor
What’s happening now?
2000 - 2007
Consider the current market situation — we can expect to hear continued worries
over the economy, corporate earnings, the threat of terrorism, the war with Iraq
and the subprime mortgage crisis.
2000 – Tech Bubble Burst
2001 – September 11th Terrorist Attacks
2002 – Corporate Accounting Scandals
.. U.S. Invasion of Iraq
It is difficult to say that the worst is behind us. No one can accurately predict future
stock market moves, but when you look back at those periods in the 30’s, 40’s and
70’s, you can clearly see pockets of buying opportunity in the equity market.
.
2007 – Subprime mortgage crisis
“Remember that stock markets are always shifting between greed and fear
[—or worry]. At the extreme of greed, great buys simply disappear, no
matter how hard we might try to wish them into reality. At the extreme of
fear, when all the excess has been wrung out of the market, great buys are
all over the place.”
– Robert Menschel, Senior Director, Goldman Sachs
Author of Markets, Mots & Mayhem: A Look at the Madness of Crowds (2002)
S&P 500 Index Total Yearly Returns
28.69%
5.49%
-9.08%
2000
2001
-22.10%
2002 2003
2004
2005
2006
2007
Source: S&P 500 Index
So, When Is The Best Time To Invest?
Anytime. It is the length of time you’re in the market that historically has made the most significant contribution to returns.
If you redeem assets or simply remain out of the market during periods of decline, you often miss the upward trends that can
significantly increase your portfolio’s returns.
-
Past performance is not indicative of future results.
All investing involves some degree of risk, whether it is associated with market volatility, purchasing power or a specific security.
The S&P 500 Index is a broad-based measure of the U.S. stock market based on the performance of 500 widely owned common stocks. The index is unmanaged; its performance does not
reflect fees or expenses.
For more complete information about the Fund, call 1-800-526-7384 or your investment representative and request a prospectus.
Please consider a fund's objectives, risks and charges and expenses, and read the prospectus carefully before investing. The
prospectus contains this and other information about the Fund.
Goldman, Sachs & Co. is the distributor of the Goldman Sachs Funds.
Copyright © 2008 Goldman, Sachs & Co. All Rights Reserved. Date of First Use: February 8, 2008
08-5207.MF.TMPL / EI-164 / 02-08
NOT FDIC-INSURED
May Lose Value No Bank Guarantee