A fun meme was going around on Facebook last weekend that said:
“Just a Warning, this week is starting by changing the clocks, has a full moon and ends with Friday the 13th. Good Luck People.
P.S. Don’t forget to wash your hands”.
As it turns out, that warning did not do the week justice as far as the stock market and our investment portfolios are concerned.
It happened whiplash fast. A week where the biggest warning for the coronavirus was to wash your hands and stay home if you feel sick ended with many of us feeling quite sick, but not because we had the virus.
This past week ended a record breaking 11 year bull run as the major market indices officially entered bear territory, defined as falling 20% or more below their all-time highs.
Because in this life none of us can predict the future, we rely on what we know and have learned from the past. But there is always that underlying itch that says, “but is this time different”? In talking with my friend and colleague Michelle this past week, also a financial advisor (a phenomenal one I will add), she remarked, “‘this time’ is always different, but also not different”. Meaning, it’s a new catalyst that pushed our markets into bear territory this week, but not different because we’ve been here before, and each time, the market eventually recovers and investors continue to make money in their portfolios.
So, following this crazy week, I thought I would share with you a compelling video by Loring Ward that depicts the value of $1 invested in the Total US Stock Market in 1927 and if left untouched, the value that single dollar would be today.
It gives a great perspective on the long term effects of “bad news” and “bear markets” on the overall stock market.
It covers over 90 years in about 3 minutes, so stick with it to the end for an inspiring quote from legendary investor Warren Buffet.
This clip will eventually be updated to reflect this past week and whatever the weeks and months ahead will bring, but I remain confident that history will again repeat.
None of this is to say it’s easy to watch our portfolios take a hit. It’s a punch in the gut and it takes resilience to stay the course. But when we ride the wave, history shows us that staying in the market is the best place to be for the long game.