Business life: My finance news blog

Some young adults have lost faith in the stock market after watching their parents and grandparents suffer declines over the past decade.

But investors just starting out can actually benefit from the carnage if they jump in and keep buying, according to a study of returns after bear markets.

That can be a tough sell.

Many people who came of age in the 1930s, the last decade when markets suffered such big losses, were so burned they swore off stocks for more conservative investments such as bonds and Treasurys.

Others who did invest in stocks traded actively in an attempt to avoid losses, an approach that Jim Coryea of Denver favors.

Coryea, 23, who has been investing since age 19, said he lost faith in the buy-and-hold strategy after his mother took a 40 percent hit to her portfolio.

"That sealed the deal for me in not believing in a long-term focus," he said.

What many may not realize is that the stretch from 1999 to 2008, measured by average annual losses, has been harder on investors than even the period from 1929 to 1938. The S&P 500 lost 1.4 percent a year on average in the past decade versus 0 lowest fee payday loans.9 percent in the Great Depression.

"You have to educate yourself enough to understand this is a silver lining for you," said Christine Fahlund, a senior financial planner with T. Rowe Price. "You will go through bull-market cycles when those shares will be worth more."

The biggest gains historically have gone to investors with the stomach to buy in bear markets. A $500 investment per month across a 30-year period starting in 1929 and through the Great Depression would have grown to $1.9 million, according to Price research.

By contrast, someone who started out in one of the most comfortable periods to invest, 1950 to 1959, made only $809,036 at the end of 30 years.

Coryea said turmoil in the market had reduced the desire of friends his age to invest in stocks. And he remains skeptical of the recent rally. For the long term, he worries about massive debts the government has accumulated. "There is no silver bullet to get us out of this."

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