You can learn the science of investing in the classroom, by reading books, and seeking out subject-matter experts online. Gaining insight into topics relating to inflation, interest rates, asset allocation, and diversification will give you the foundations you need to start investing.
However, beyond being book-smart, it’s the art of investing that’s most likely to determine your success. And this isn’t a lesson you can learn in a book. Rather, you learn it as you go – through the events you experience in life. But only if you take the time to reflect and truly learn the lessons they can reveal.
Stepping back and taking time to look back on history can help you prepare for how you might respond to similar future events.
Looking back over the last 6 years
Since the start of 2020, investors have experienced a lot of change and uncertainty.
With markets currently relatively calm (despite the ongoing US-Iran conflict), now is a good moment to reflect on what’s happened over the last six years and the lessons we can draw from this period.
While major market events typically happen every few years, with long stretches of relative calm between, the recent past has been far busier than usual.
Though it’s impossible to predict how the next six years might unfold, it’s worth reflecting on events that have taken place between 2020 and today.
- March 2020: The Covid pandemic shuts down the global economy. Markets fall 34% in 32 days.
- February to October 2022: Russia invades Ukraine in February. Global inflation hits 40-year highs, the rate hike cycle begins, and markets enter a bear market in June.
- September 2022: Liz Truss’s UK mini-budget triggers a gilt market crisis.
- March 2023: Silicon Valley Bank, Signature, and Credit Suisse all collapse within weeks, sparking fears of a 2008-style banking crisis.
- October 2023: Hamas-Israel war begins.
- August 2024: The yen carry trade unwinds. The Nikkei has its worst day since 1987, and global markets follow.
- January 2025: Chinese AI startup DeepSeek triggers a global tech sell-off. NVIDIA loses $589 billion in a single day.
- April 2025: Trump’s “Liberation Day” tariffs trigger a 12% S&P 500 decline in seven days.
- March 2026: The US-Iran conflict closes the Strait of Hormuz. Markets fall around 10% from recent highs.
Summing up the last 6 years
Despite a steady stream of unsettling headlines and global challenges, markets have continued to grow:
- In 2019, the companies that make up the S&P 500 collectively earned around $139 per share.
- In 2025, they earned around $253 per share.
The businesses you hold in your diversified portfolio are earning substantially more than they were six years ago, despite living through the tricky events listed above.
How many of these events did you lose sleep over at the time?
There’s no right or wrong answer. None of your worries were misplaced; the events were serious and your concerns were perfectly understandable.
And yet, as with so many things in life, hindsight allows us perspective we couldn’t possibly have at the time.
What all of this proves is that while short-term concern is perfectly natural, fears can most often only be alleviated over the long term.
Aim to maintain the right balance
It’s important to stay informed about the world. But for long-term investors, the challenge is to remain informed while not letting that information derail your plan.
Achieving this while being bombarded by noisy headlines can be tough.
If you’ve remained invested through the past six years and continue to be aligned with your long-term plan, you’ve learned lessons that could help you strengthen your resolve in the event that the remainder of the decade brings similar uncertainty.
The smartest investors will rise to the challenge, take the lessons on board, and prepare for the next test before it arises.
This is how you learn the art of investing.
