I’m unbelievably proud of you all!
As you know, we never make any short-term, or even intermediate-term, projections on the markets as history has demonstrated again and again how fruitless that exercise is. Perhaps it’s not a bad idea to occasionally look back a little at what has occurred from time to time. In the last 4 years, the stock market had not had any meaningful correction until around August of 2015. Last summer the market dropped…but came back fairly quick. Then in January of this year, the market dropped a fair amount again…but came back fairly quick. Most recently, Britain elected to leave the EU and the market dropped a fair bit….but came back fairly quick.
It has been interesting visiting with other financial advisor friends of mine and just taking pulse of how other folks are handling all of this. It has occurred to me that many investors (and sadly many financial advisors) took the lessons of 2008-2009 and concluded that the road to investing success is to run for the exits the moment any volatility starts occurring. It’s depressing to think about how much wealth has been lost in the last year with all those poor souls jumping out of their portfolios in panic. Think about it, when do you get back in the market when you have jumped out? If history is any guide, those folks get back in somewhere near the top of the next market cycle.
This brings us to consider the long-term prospects for the global stock market. The pain of 2008-2009 was so severe that even though the market has tripled over the last six years, many investors are still terrified of it. The good news is, that might be an indication that this bull market still has a long way to go. When everyone is in love with stocks is when we get worried! I still remember stopping at a small country store in 2005 and receiving a business card from the cashier, explaining she was getting into real estate. In retrospect, that was a “tell” of where the real estate market cycle was.
At a recent conference I was visiting with some advisor friends of mine who share our buy and hold principles and practices. Many of them noted that they have been inundated with panicked clients over the last year, begging them to sell all their stocks during each of the above mentioned corrections. It got me thinking about how few calls we have received and not a single one of you panicked out since coming aboard as a client. I want to sincerely thank you for the confidence you’ve shown in us to help avoid the mistakes so many others are making.
Just because we didn’t hear from you, doesn’t mean we don’t want to hear from you! Please remember that I’m ALWAYS available. I encourage you to contact me anytime you think a little perspective might be helpful.
Now go enjoy the Summer!