We now find ourselves closing in on the end of the fourteenth month of this Bear (negative) market.
Just like the Tech Wreck market from March of 2000 through October 2002 when I wrote the now famous update The Wicked Witch is Dead (read it here), and the Great Recession bear market from October 2007 through March 2009, it is an exhausting experience.
Like those two bear markets, this one is offering opportunity for investors who are patient during the passing through period, like now.
As we thoughtfully and intentionally dollar cost average back into our ownership of Corporate America, I thought you would enjoy a few observations from my friend Mike Williams.
I think you will be glad you did when we look back on this 2-year mess, a few years from now:
Losing money hurts 3x more than making money feels good - hence the need to be still.
Bear markets happen fast. Bull markets happen slow.
"Handling" near-term volatility, in theory, is 100x easier than living in and passing through it. In the end, it is all about time and patience.
Whatever happened over the last 12 months tends to have a massive impact on what you think will happen over the next 12 months.
When prices are rising, investors wish for a bear market to buy cheaper. When a bear market appears, investors wish for it to end as they hide in mental bomb shelters.
The biggest factor that will determine your wealth-building returns is the amount of time you can let pass with patience.
There will always be huge demand for forecasts of things which are not forecastable.
The stock market will always attract people who are in a rush to build wealth and build wealth for people who are not in a rush.
Stocks cannot make you wealthy if your behavior is wrong.
Every single bear market in history has proven to be fantastic news for buyers/investors, but 90% of investors still freak out when they occur.
"Doing little or nothing" often feels reckless, but it's almost always the right move. The need to react is an emotion - not a fact.
Investing isn't easy, it never has been and was not designed to be so.
Alas, the largest creator of wealth known to mankind has been the U.S. stock market - over time.
There's that word again - time.
I’m interested in your thoughts, comments, and observations. Feel welcome to call, email or stop by the office and say Hi.
James O. Lunney, CFP®
CERTIFIED FINANCIAL PLANNER™ Professional
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.