Good morning & happy Monday!
“Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”
– Warren Buffett, legendary investor
1,092 days ago was a very important day. Monday, March 23, 2020 was that date and it occurred 3 years ago this week. Even though that specific date likely does not stand out to you, you most certainly remember what was going on in the world and your investments … COVID-19 dominated the headlines, destroyed the economy, and devastated our investments.
Well, Monday, March 23, 2020 was the bottom of the COVID-19 market pullback. Since it was a Monday, guess what I did that day? You guessed it … I sent out a Monday morning memo 😊 Here is a portion of the email I sent out that day:
It is so incredibly easy to lose perspective during times like these as emotions are running high and toilet paper is running low, so I will respectfully ask for a few moments of your time to share a few thoughts with you this fine Monday morning.
Now, there is not a single statistic that I can share with you that will change the fact that this is an incredibly emotional time and our feelings are telling us “this time is different” and “we may never recover.” It is only human to have those feelings and all of us are experiencing them. It is perfectly fine to have the FEELINGS, but the mistake occurs when we ACT on those feelings. This is so incredibly hard because we have this feeling of needing to “do something” … but in 22 years in this industry it is my observation that that is most often when mistakes are made.
Over the last few weeks I have had many conversations with clients about HEART-BASED decisions and HEAD-BASED decisions. The HEART is telling us to bail on our investments and the corresponding plan that was built by them, the HEAD is wisely telling us that market downturns happen and that the plan that was built by them will sustain the current market forces. May I implore you with everything that I have to listen to the HEAD over your HEART during such times as these. Stick with the plan.
As you likely have heard me say before: Your goals dictate the plan, the plan dictates the investments … Goals → Plan → Investments. Unless your goals have changed it is my strongest recommendation to not change your investment strategy.
Stick with the plan. Stay the course. Don’t lose hope. Don’t lose perspective … this too shall pass and we will be better & stronger on the back end.
My friends, the day I sent that memo, nearly 3 years ago, the S&P 500 closed at 2,237.40.
Today the S&P 500 is hovering around 4,000.
I am a big Tampa Bay Lightning hockey fan. In the 2019-2001 season they won the Stanley Cup. The 2020-2021 season brought another Stanley Cup to the organization … back-to-back Stanley Cup champions! Absolutely incredible! Last season (2021-2022) the Lightning made it to their 3rd Stanley Cup final in a row, only to lose the series to the Colorado Avalanche.
June 26, 2022 was the date the Avalanche hoisted the Stanley Cup and as a Lightning fan it was a sad day for me. The following day I was still disappointed and was talking to a fellow Lightning fan and trying to be positive and optimistic I said “If you would have told me 3 years ago that we would go to 3 straight Stanley Cup championships and win 2 of them I would have been ridiculously excited.” My friend’s response: “Yeah, me too … but I still wanted to win 3 in a row!”
I agree, but you don’t win a championship every year. Some years have massive disappointments, other years have thrilling victories, and most years have a combination of both.
Sound kinda’ like something else … maybe the stock market? 😉
Right now it’s so easy to get wrapped up in conversations about inflation and Fed policy and the challenging year that 2022 was, but I thought I would take this opportunity to provide just a little perspective on how far we have come.
If I would have told you 3 years ago that the S&P 500 would be up somewhere north of 75% today, I would imagine you would have gladly said “I’ll take it.” And yet, I don’t think I’ve had that conversation a single time in the last 12 months.
Why? Because our human minds are not wired for perspective, they are wired to think about what is / could go wrong. Perspective is hard most times in life, and exceptionally hard in times of stress.
Providing perspective is one of my primary jobs as your financial planner. My hope is that this message will cause us to take a deep breath and look at how far we have come over these last 3 years. Perspective changes everything … I’ll discuss that more next week.
As I stated 3 years ago, I will restate here: Stick with the plan. Stay the course. Don’t lose hope. Don’t lose perspective.
It is a tremendous honor to serve you! Please never hesitate to reach out with any ways my team and I can support you.
Make it a great week ahead!