Long-term investing means just that. Holding long-term through ups and downs. Yes it’s challenging at times, but that’s part of the journey. There are no shortcuts, there is no free lunch, and timing and trading doesn’t work. Many of the so called successful traders that piled onto the noisy trading platforms during the frenzy are gone now, or at a very minimum are dormant. The public loves stocks at the top, and they hate stocks at the bottom.
It went down further than I thought it would. I figured 15-20%. As of last Friday it’s down 25%. Stocks have only been down this much 9 times since 1950. This is number 10. That means about every 7 years. Since the great recession in 2008, this is number two, or twice in 14 years. Unfortunately they were crowded together in 2020 and now. Surprising? Yes. Unusual? Not really.
A big part of our job is to help our clients get through these periods of time without totally blowing up their investment plans. This is true because it’s easiest for any of us to want to blow out at the bottom. I don’t know what happens next. Nobody does. But all indications point to this ending at some point. My best advice is to be patient, and to call or email either myself or Ernie for a visit when you feel anxious. We will do our best to help. Sometimes just talking helps. Other times we may be able to tweak things a little.
And remember, if you bought some land last year at $8,000 per acre, and your neighbor called you up this year and offered you $6,000 per acre for that land, would you sell it to them? I wouldn’t. Not if I didn’t absolutely need the money.
Hang in there. I see the market is strong today. And 4th quarter tends to be the best quarter. We shall see!
Best Regards,
Mike
50 Year Chart of the Dow Jones Industrial Average
I circled the current price action, as well as the last time the Fed had to fight persistent inflation back in 1981. The Dow Jones was 950 then. Today it is 29,500.
