It’s Time for a Perspective Check: Current Market Volatility

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

By Karin Grablin

As we write this on March 9th, it is the 11th anniversary of the global panic attack that marked the bottom of the Bear Market of 2007-09.

Isn’t it a bit ironic that, on this anniversary, we are marking it with another global panic attack?

The S&P 500’s opening level today (2,764) is down over 18% from its all-time high, which was achieved less than a month ago, on February 19th. Over the last several decades, declines of this magnitude are fairly common: the average annual drawdown from a peak to a trough since 1980 is close to 14%.* What makes the current decline noteworthy is not its depth, but its suddenness.

As we all know by now, the following events have led to this decline:
• the outbreak of a new strain of virus, the extent of which can’t be predicted,
• the economic impact of this outbreak, which is equally unknown, and
• most recently, the beginning of a price war in oil (a problem for those in the oil business, but great for those of us who consume it.)

The common theme for this market volatility is the unknown: we simply don’t know where, when or how these events will play out. It’s been our experience that what markets hate and fear the most in this world is uncertainty. But we have no control over these uncertainties. What we can and should have perfect control over is how we respond to it.

Or we can choose not to respond at all. Why? Because the last thing in the world that long-term, goal-focused investors do when the whole world is selling out of their investments is – you guessed it – sell their investments. If fact, those same goal-focused investors usually figure out a way to push cash to work instead.

Just last week, billionaire investor Howard Marks wrote, “It would be a lot to accept that the US business world – and the cash flows it will produce in the future – are worth 13% less today than they were on February 19th.” Today, when they’re down 18%, that statement is even more true.

Relax, stay calm, and keep your spirits up. This crisis too shall pass.

Share:
facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

RECENT POSTS

Charitable Giving Strategies in a High-Income Year

Tom Fridrich, JD, CLUⓇ, ChFCⓇ, Senior Wealth Planner  The end of the year offers an ideal opportunity to look both forward and back — reflecting on recent achievements, while setting goals for the upcoming months. For many of my clients, it’s also a time to review their finances and i …

Let’s Talk About Midterm Elections and Your Investments

This week was midterm elections and we’ve had many questions about what it all could mean, which we’ll tackle in today’s blog. We consider it a great honor to vote, and while we may not know the final results of the election for days (or even months), what we do know is the election will …

3 Nontraditional Ways to Give That Still Qualify for a Tax Deduction

Kevin Oleszewski, Senior Wealth Planner ‘Tis the season to give. In fact, 37% of charitable giving occurs during the last quarter of the year — 20% of it in December alone, according to a survey conducted by the Blackbaud Institute. And while the holidays are traditionally a time to reflect …

Considering Tax Loss Harvesting? What You Need to Know First

Kevin Oleszewski, CFP® Senior Wealth Planner As the tax year draws to a close, many high-income investors will look to reposition their portfolios to intentionally generate losses as a way to offset gains — an investment strategy known as tax loss harvesting.
1 2 3 87 88 89

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation