FearLESS Friday

Another Wild Ride

Wow, what a wild week this has been in the stock market.  The stock market has climbed 15% this week as of 11:34 am and we saw one of the 4th largest increase in a single day on Tuesday this week with the markets climbing over 11%. 

A large part of what drove these gains was the anticipation and now the culmination of the government passing a $2 Trillion stimulus package to help businesses and the economy recover.  If you are a business owner or curious how this stimulus package could benefit you give us a call we would be happy to walk you through what you should be doing.

When I talk about a wild ride, here is what I mean.   2 of the top 10 largest daily declines in history happened THIS month on 3/16 and 3/12 with the stock market dropping 12% and 10% respectively.  Also of note 2 of the top 11 increases of all time happened THIS month as well.  3/24 and 3/13 with the stock market rising 11% and 9% respectively. While It’s unnerving for all of us when prices change so quickly It’s also important to stay grounded and to not panic. The extreme nature of the daily changes is confirmation that the stock market works and is extremely efficient at setting prices.

LARGEST DAILY % MOVES IN THE STOCK MARKET

One of the reasons we talk about a lot about patience is that missing a couple of days performance can have a lasting impact on your portfolio.  While we would all like to move to the sidelines to avoid the worst days in the market there is no proven way to do this effectively.  History argues for staying put through good times and bad.  Our goal is to structure your portfolio in such a way that takes into account your spending and other needs so that you can be patient through the times of extreme volatility.  There are certain fundamental things you should do when it comes to investing and rest assured we will take care of the technical aspects to make sure you get the most out of your portfolio.  For you the investor however the best thing you can do is be patient.  The adage that it’s Time in the market vs. Timing the Market is and always will be the best course of action. 

THE COST OF TIMING THE MARKET

I hope you all have a great weekend and as always we are here for you to answer any questions or concerns you might have.

FearLESS Friday

Covid 19 is new for all of us.  This informal video is designed to filter out the noise and equip you with the facts. 

Each week we hope to act as a filter, distill down the 1-2 salient and fact based insights of the week, provide one piece of perspective and provide one piece of wisdom.

• Our Communication Strategy 

• Lessons For the Next Crisis

For Every Buyer There is a Seller - Prices React Quickly

The stock market is doing what it does best.  Taking in information and adjusting prices accordingly.  These prices reflect the price of any security or stock at a given time.  It has no indication of what the value will be in the next month next year or even the next decade.  I believe prices will rise and that that they have a long term positive expected return, maybe not today or tomorrow but over time they will rise.  It's also important to remember that every time a trade takes place the person selling the stock is selling it to someone else has to buy it.  When the media makes it seem like everyone is panicking and selling their stocks remember, in volatility times like this and in good times every time someone is selling someone else is buying.

Lessons for the Next Crisis

I've attached a great article I pulled up last night, one I sent to all of you 3 years ago.  It was written 10 years after the last major market correction at a time when it was easy to be an investor in the stock market.  Stocks had rebounded from the crash of 2007, unemployment was low and getting lower things felt "normal" a much different experience than they in 2007.  While we're in a much different place today and in uncharted territory the same lessons will be learned in the future.   For those that stay patient like they those investors who sat through the crash of 2007, 2001, 2000, 1998, 1989, 1987...I could go on but you get my point.  In all of these cases those that stayed patient 5 years after the correction saw their portfolios rise a minimum of 47%.  

Increased Cyber Fraud Activity Amid Covid-19 Fears

No matter where you live whether it's CA where the state is on lock down or somewhere else these difficult times tend to bring out the worst in some people.  Be VERY CAREFUL and on the lookout for fraud and scams.  As many of us seek information on this pandemic criminals are seeking to take advantage by turning common information searches into information theft.  Here are some of the latest activity these criminals are using: 

• Outbreak maps.  Malicious actors have begun spreading malware through online maps claiming to track the spread of the coronavirus.  

• Email Campaigns.  Criminals are leveraging common forms of fraud like email campaigns using infected attachments or downloads

• Charitable giving.  Scammers are posing as charities looking for contributions to help pay for expenses related to this pandemic.  

It's important that you stay vigilant during these uncertain times.  Do not click on unknown links and avoid visiting new websites that could be operated by criminals.  

if you have any questions or need anything from us, please do not hesitate to give us a call.  

Dimensional Webcast Tomorrow

Well the last few weeks have been crazy to say the least with respect to market volatility. 

We will continue to send you information we think is appropriate as time goes on. 

In the meantime Dimensional Fund Advisors is hosting a webcast for end client use tomorrow, March 13 at 1:00 pm CT with Jake DeKinder, Head of Client Communications, and Mark Gochnour, Head of Global Client Services. They will review the recent volatility in financial markets and provide perspective on the events of the last few weeks.

During the webcast, the Dimensional team members will discuss:

• Recent volatility in the financial markets 

• Historical perspective on market declines during previous events

• Why stock price fluctuations should be viewed as a normal part of investing

We hope you can join for this event. 

If you have any questions or concerns, in the meantime, please do not hesitate to reach out and call us.  

Recent Market Volatility

I hope you're having a great week.  Amid recent events and market volatility, I wanted to pass along some material and a quick video addressing both the Coronavirus and historical market reactions to various crisis'.  

If you have questions please feel free to give us a call!