Some Perspective From 8 Years Ago

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By Steve Martin

Today, the Dow Jones Industrial Average dropped over 700 points.  This, on the heels of a week that previously dropped another 700 points. However, sometimes we need to step back to see the forest for the trees.

Eight years ago this week, the United States debt was downgraded by Standard & Poors from a top credit rating. The pundits were likely claiming this was “the end of the world.”  Looking back, the pundits were right…but only for one day.

On the first trading day following the credit downgrade, the S&P 500 stock index fell 6.6%.  However, since that date, the yield on the US 10-year Treasury note has fallen from 2.57% to 1.85% and the S&P 500 has gained +189% (total return), equal to +14.2% per year, compounded. (source: BTN Research as of 8/6/19)

During this “turbulent time,” we thought it would be valuable to share insights from Scott Kubie, the Chief Investment Officer of the Carson Group, and his 5 Tips to Survive a Market Downturn.

I’ll wait for you to finish watching…

You may have noticed Scott’s 5 Tips were…

  1. Keep the Fundamentals Foremost
  2. Know the Cause
  3. Volatility is Like Grapes, It Comes in Clusters
  4. Eliminate the “Points” and “Dollars” from your Vocabulary
  5. If You’re Going to Make any Changes, Be Strategic About It

These tips were actually from the 4th quarter of 2018, but they are as timely today as they were almost a year ago.  The more things seem to change, the more they stay the same.

SRQ Wealth looks at each client individually, but as a firm, we took a more conservative stance in the portfolios we manage about a month ago.  If you have specific questions about your portfolio and how it fits your individual goals, we would be happy to “stress test” it with you to see if gaining a better “perspective” would help you feel more confident about your financial future.

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