Big Setback? Here's The Perfect Example Of The Importance Of Thinking Long-Term

A few days ago, I did something I never do: I checked on my investments. I almost never do this because I try to make everything I do a long-term commitment, and paying attention to the day-to-day of how things are going is a distraction.

The other day, I saw a headline saying the DJIA (a common stock market indicator) had dropped over 200 points in a single day. Every talking head on TV and writer for financial news was sounding the alarm: “The market is ‘crashing!’ Is this the end of prosperity? Is the world plunging into despair again? (Tune in at six, and we’ll tell you).”

Of course, this is the kind of news that gets reported every day regardless what’s happening in the world. Every piece of information is either the greatest thing to ever happen to humanity or the beginning of the end times.

I thought this particular incident was funny, so I decided to look up a little, widely available historical info to compare it to.

The following is a series of seven graphs—all looking at the same financial data—over a long period. What they reveal is a fantastic argument for why you should ignore the daily ups and downs of your life and, instead, look for the steady progress as an indication of success.

djia-1-day — The stock market over 1 day: Is this the beginning of the end of humanity? Sure looks like it.

djia-5-day — The stock market over 5 days: Yep, this is looking really bad.

djia-30-days — The stock market over 30 days: Oh no. It just keeps getting worse. Time to stockpile ammunition and prep the bomb shelter.

djia-90-day — The stock market over 3 months: Oh my God! We’ve lost 3 months of fortune! Could this keep going forever?

djia-1-year — The stock market after 1 year: Oh wow. We’ve actually had a really good year. There were some bumps along the way, but look at that climb! Maybe life will go on after all.

djia-5-year — The stock market over 5 years: Wow! Look how good things are! I’ve already forgotten about yesterday’s “crash.” Now, what to do with all these barrels of rice?

djia-40-year — The stock market over 40 years. Holy crap! We’re all super rich! Someone get me a bathtub of caviar!

You’ve probably had similar experiences in your life. When you choose to commit yourself to an idea, a project, a business, a habit, etc., you know what matters is how you perform over time. You might have a bad day once in a while. You might even have several of them in a row. Likewise, you might have a great day that makes you think you’re doing better than you are. You let one day of luck get to your head, and then you’re unprepared for the trials and difficulties that lie ahead—you give up, wondering what went wrong.

If you let those days get to you, it takes your attention away from the real goal: creating something great for the long-term. So keep your eye on the ball. If you’re doing something that takes years of work, don’t distract yourself with what happened yesterday. Instead, look at what happened last year. And make decisions using that information.