In a recent episode of Motley Fool Money, Robert Brokamp conversed with Ben Carlson, director of Institutional Asset Management at Ritholtz Wealth Management and author of the upcoming book, “Risk and Reward: How to Handle Market Volatility and Build Long-Term Wealth.” The discussion, which took place on April 18, 2026, tackled the importance of long-term investing and the psychological hurdles investors face during market downturns.
Carlson emphasized that even the most unfortunate market timers—those who only invested right before major crashes—could still achieve significant wealth if they held their investments long enough. He illustrated this point through a parable about a fictional character, Bob, who made investments during significant market downturns but patiently held onto his stocks over the decades. Remarkably, despite poor timing, Bob’s portfolio grew to approximately $1.1 million by retirement.
Brokamp highlighted that while investing in the stock market is inherently rewarding over the long term, the emotional and psychological strain during downturns often leads to panic, prompting investors to sell at the worst times. Carlson noted that such fears stem from human psychology, which remains a constant across market cycles. He discussed how emotions are not inherently good or bad but are part of human nature that can affect investment decisions.
The conversation transitioned into broader discussions about historical market performance, including the importance of diversification. Carlson pointed out the significance of having a well-diversified portfolio, as it allows investors to weather market storms without suffering catastrophic losses. This thinking is especially pertinent during turbulent times, as it’s easy to fall into the mindset of “this time, it’s different,” which has historically led to investor mistakes.
During the discussion, Carlson shared that one of his goals with “Risk and Reward” is to reassure investors that despite past downturns—including the Great Depression and the dot-com crash—the stock market has a strong track record of recovery. He presented statistics, such as the worst 30-year annual return from investing in the stock market, which occurred during the Great Depression and still yielded an 8% average annual return over three decades.
They also touched on Japan’s economic history, which has lessons for investors today. Carlson pointed out that despite Japan experiencing what many consider the biggest financial bubble in history—resulting in a prolonged stagnation—global market diversification largely cushioned the blow for investors outside Japan.
The broader takeaway from Carlson’s insights is clear: investing is inherently challenging and comes with risks. However, maintaining a long-term perspective, diversifying assets, and avoiding panicked decision-making during downturns can significantly improve wealth-building outcomes. As Carlson succinctly framed it, while there is no perfect investment strategy, understanding your personal comfort with risk and adhering to a disciplined investment plan will yield the best results in the long term.
Listeners interested in these topics can check out further discussions and gain insights from Carlson on various platforms, including his blog and podcasts, as he continues to share strategies for navigating financial markets successfully. For those ready to invest, a compiled list of recommended stocks is also available for exploration.
