Let’s start with a little levity. As the wise and insightful Roseanne Roseannadanna once said, “Well, Jane, it just goes to show you, it’s always something—if it’s not one thing, it’s another.”
And from Captain Obvious: “This stock market crash really sucks.”
Everyone is processing this event, or crisis, or whatever you want to call it differently. Some of you have called anxious to deploy built-up cash reserves to the market. Others, more often, are expressing increasing angst as big drops are followed by mediocre rallies. When will the decline end and what should we do?
It’s a sign of the soundness of our strategy and, perhaps, the quality of our communication that we have actually heard from very few of you. Although T.J., Jason, David, Alex, Greg, Lachlan, Phil, and myself are reaching out proactively to all our clients, we also encourage you to call us if your confidence and fortitude are waning and you’re in need of some support.
I can tell you that personally, I have felt and thought many of the same things you have. I’ve been through enough strong up and down markets to know we were due for a correction. I didn’t think it would be like this. That’s the power and the unpredictability of the market at work.
I considered more than once getting out of stocks completely to “keep my powder dry”—both prior to this decline and in its first days. That’s what almost 40 years of working in this crazy business does to you. But what it has also done is to thoroughly convince of me of two things.
First, market timing is never as easy as it seems, particularly during major market swings. And hindsight is the devil. You convince yourself you knew a decline was coming (this year, last year, the year before…). You scan articles and read the ones that confirm your view. You tell yourself you’ll never put yourself in this position again, of watching your wealth drop 30% or more. But you succumb to the rationale (or was it emotion?) and eventually the market explodes upward. You don’t believe “the rally” will continue and the next thing you know the market’s up 100%, or 450%, or whatever.
Second, my personal wealth is due in large part to clients like you who have invested your trust in us and your intellectual capital in a very sound, evidence-based methodology that simply works—if you let it. I will suffer just like you suffer and I will prosper just like you prosper. We’re in this together. I would not do anything with my wealth what I would not recommend to you.
I hope that the market soon determines this reaction to the coronavirus is way overblown and that a treatment and, possibly, a safe vaccine is forthcoming soon. In the meantime, I’ll do my best to ignore what I believe to be an extremely irresponsible and unprofessional media and spend more of my time, carefully, with family and friends.
Stay healthy and optimistic.
Founding Partner, CIO
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