| You might think that wars have had a negative | | | | technology stock prices soared to new heights until |
| impact on the economy, but for the most part, the | | | | the bubble burst in March 2000 and the party was |
| exact opposite is true. World War II was very costly | | | | over. The dot-com bubble did not lead to a |
| in terms of human lives and government | | | | depression though but it did major damage to |
| expenditures. But to gear up for the war actually | | | | people's investments. |
| produced a booming economy. The Korean War and | | | | So how do you survive long periods of low market |
| the Persian Gulf War had similar effects, although | | | | returns? |
| there was a recession following the Gulf War in 1992. | | | | Maintain a diversified portfolio. If you have a |
| On the other side, the Vietnam War and the War on | | | | diversified portfolio you can stay the course and let |
| Terror have had negative effects on the economy. | | | | the market work things out. |
| The Vietnam War lasted for 16 years and the | | | | Avoid the next hot investment. Resist the urge to |
| average return for the S&P500 during that time | | | | invest in the latest new technology craze. |
| period was a small 3.91 percent. Also similarly was the | | | | Don't depend on high investment returns for |
| return for the S&P500 from 2001 to 2007, a | | | | retirement. |
| dismal 3.02 percent. | | | | Keep investing periodically throughout these difficult |
| The dot-com bubble in the 1990s burst in 2000. Just | | | | periods. |
| like in the 1920s, investors believed that easy riches | | | | Include fixed income investments, like bonds and |
| could be had in the stock market. Internet and | | | | certificates of deposit in your portfolio. |