Navigating Market Turbulence

Investing is meant to be long term and after enjoying 11 years of a bull market, the longest in US history, this week it has come to an end.

As we officially enter this bear market, these can be the key make or break moments for some investors. While it’s still early, it can bring out incredibly intense emotions and managing these emotions is one of the most important skills we can develop as investors. While losing money feels twice as bad as making money feels good, all declines are temporary and nothing more than an interruption in the perpetual advance of stock prices. Long term the stock market is incapable of inflicting permanent loss on a diversified portfolio, permanent loss is only a product of panic when we capitulate to avoid further loss.

Panic tends to set in when we begin to experience a lack of control and as we are bombarded by the news, it’s possible that this sensation may begin to rise, and without any planning, it can take over. This is where we must remember that we have done the proper planning anticipating that market declines like this are in fact a normal occurrence. This planning also establishes a strategy that we have agreed upon and have in place that helps to understand and mitigate the impact it could have. Having done so, keeps us in the drivers seat with a bit of control and allows to keep the panic at bay. Like all previous market declines, this too shall pass.

If you have any questions or just want to talk, do not hesitate to reach out.

Webcast Opportunity Today, March 13th

If you are interested in hearing from one of the investment managers that we work with, Dimension Fund Advisors, there is a webcast today at 11:00 am AZ Time/2:00 pm EST.

This is an excellent opportunity to hear fact based information as they review the volatility in financial markets and provide perspective on the events of the last few weeks.

During the webcast, the Dimensional team members (Jake DeKinder, Head of Client Communications, and Mark Gochnour, Head of Global Client Services) will discuss:

  • Recent volatility in the financial markets
  • Historical perspective on market declines during previous events
  • Why stock price fluctuations should be viewed as a normal part of investing

Please follow this link to register for the webcast. I hope you can join for this event.

Please note that this webcast will not be recorded.

One Last Note

After the close of yesterday’s stock market the S&P 500 and US bonds remain positive over the last three, five and ten years.