‘Every downturn in history has ended in an upturn’ — Acorns CEO

What goes down must come up? Markets often bounce back.

Investing app Acorns aims to help people grow their savings and wealth, but how does inherent market risk factor into the equation? CEO Noah Kerner gave his thoughts on that question at a recent BlockShow panel.

"We send this message to our customers: that every downturn in history has ended in an upturn,” Kerner said on Wednesday. Following a particularly difficult period in the markets roughly two years ago, Acorns sent out the same sentiment. Acorns does not offer crypto trading, but Kerner's comments should be of interest to the industry. 

A chart of the Dow Jones Industrial Average, a common mainstream market barometer, validates this comment to a degree, showing an overall upward price journey since the late 1800s.

Although the current representation of the stock market has continually bounced back over the past hundred years or so, not everything recovers all the time. Kerner’s comment does not take into account the many individual assets and companies that have died throughout history. On a relatively shorter time scale, most crypto projects have died out.

Established markets, in general, have proved a level of resilience, however. Bitcoin (BTC) is a current example. The asset has refused to die, ultimately growing after all its downturns.

Crypto and mainstream markets suffered a major decline back in March when COVID-19 news took over headlines. Both have since rebounded, showing resilience.

“As usual, the world was coming to an end again,” Kerner said referencing people’s mindset at the time. He remembers March 18 as particularly difficult for mainstream finance, occurring after a number of red days for the Dow. He picked that time to invest heavily into mainstream traditional markets.

“I was panicked too. I mean, that was a scary moment. But I remembered in my head, ‘Every downturn ends in an upturn, every downturn ends in an upturn, and if the world is really coming to an end, it doesn’t matter anyway.’ So, I just put in a whole bunch of money that day.”

Looking at the past can sometimes help spur insights on the future. Kerner explained:

“Just have faith that history is usually a predictor of the future. Not always, but it usually is, and if history is usually a predictor, then things are going to end up in a better place than they are when it’s really bad. So, just stick with it.”

Acorns serves as a mainstream financial platform hosting a capability that rounds up each user's everyday commercial purchases to the nearest dollar, setting aside the rounded portion for investment purposes. The platform only offers mainstream investments, although a similar crypto-specific service, called RoundlyX, also exists.