Broker Check

Hope Has a Great Track Record

April 02, 2020
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2020 has been off to a rough start, to say the least. The COVID-19 pandemic is wreaking havoc globally. Anytime uncertainty exists, stock markets tend to get extremely skittish, and understandably so. But....

Humanity tends to recover. 

Below is a graphic depicting every bear and bull market since the peak of 1929. Bear markets tend to be sharp, short and scary. The bull markets tend to last longer and more than recover. In fact, each and every time, our economy recovered and went on to new record highs. 

Remember a few Fundamentals: 

1. Build your investment strategy around (a) Your risk budget and (b) Your long-term goals. This may help reduce the likelihood of unhappy surprises.  
2. Stick to your strategy. In good times (like Dec 2019), people get tempted to "get aggressive." Likewise, bear markets often tempt people to "wait it out." Neither is optimal in the long run. Nobody knows when the "top" or "bottom" will be. Nobody. Our only realistic options are patience and managing the risk in our portfolios. 
3. Use large market movements as opportunities to re-balance your portfolio. This helps keep your portfolio aligned with your risk budget.