First off… THANK YOU for the many clients that have already signed paperwork for our RIA conversion. If you haven’t heard from us yet, please be patient. We are moving as fast as we can. If you’ve heard from us but haven’t signed yet, please help us with our efficiency and do so soon. Also, stay tuned to this post for a special surprise in the Housekeeping section.
It sure hasn’t been easy being an investor these past few months. We hit this year’s highs way back in July on the S&P 500. As I mentioned a few posts ago, I was expecting a pullback. We simply went too high too fast. November tends to be a friendly month for the markets so fingers crossed for the next 30 days. When it gets like this, I often ask myself a few questions to get me back on track. Here’s how it usually goes:
Q: Do I think the markets will be higher five years from now?
Q: How often do these pullbacks/corrections happen?
A: I look this up every time because I’m always questioning if I remember how often they occur. Basically, the short answer is about every other year. That is quite often!
Q: How has my portfolio done looking back longer than my last statement—say for example, the past 1, 3 or 5 years.
A: Usually, that’s very easy to see. The markets have done quite well over time.
This little exercise always brings me out of emotion and into logic. Not many of our clients have even brought up being nervous about the current state of markets--for which we are extremely grateful. However, I was in a conversation the other day about emotional investing. It got me thinking. If I had to guess where I see the most nervous group, then it would probably be from mid-50s to mid-60s, which makes total sense. This is the age group that is close to retirement or just starting it. Then after someone has retired for a couple years, they seem to be almost completely fine. It’s an interesting psychological difference, and it happens very quickly. My assumption is that it’s simply getting through the first couple years without a steady paycheck. Plus, that age group eventually realizes that they have another 20-30 years of investing ahead of them! That’s a long time. If you were to go back 20-30 years, that would put that same group in their 20s-40s. If you ever find yourself worried, think about all the ups and downs over those decades. You most likely stayed invested through all of that volatility. Would it make sense to stop now? You’re still so young.
SANTA is coming to our office for a private, client-only event. If you are a client with kids or grandkids that would like to see Santa, we will be hosting the big guy on December 5th from 5:30-6:30pm. There will be light refreshments and probably a story for the kiddos read by Santa himself. If you are interested in signing up for this event, please email us at firstname.lastname@example.org or give us a call. Just let us know how many adults/kids will be attending. Again though, this is for clients only and is not open to the public so RSVP ASAP. We’re making a list (yes, an actual list) and checking it twice (maybe even three times) so please be sure to sign up!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risks, including the loss of principal.