WOW! We are already over halfway through the year. We have a seen a lot this year. As a look back to January and February, it feels like it was years ago, although time has flown by over these last several months and I find it hard to believe that we are halfway through June.
I have been thinking about you and I wanted to offer some market insights and my thoughts ….
The Disadvantages of MARKET TIMING
It is always easy to look back and think “I should have made changes with my investments,” maybe jumped out of the market or reallocated to bonds or fixed income.
I would caution you to not think about market timing or letting your emotions drive your investment decisions. Over the long term history has shown that marketing timing does not work as well as staying the course, especially during times of market volatility.
In a recent article by the Simple Dollar, “They took a look at a $10,000 investment into the S&P 500 for 38 years. By missing only the five best days over that period, the investment grew to $458,476. Meanwhile, if the money remained in the account untouched, it would have grown to $708,143.” Although, past performance is no guarantee of future market returns, this study shows the power of long-term investing and staying in the market. (The Simple Dollar, May 21, 2020, FMG Suites)
Benefits of the MARKETS
Since the beginning of the COVID-19 outbreak, we’ve seen a great deal of market volatility. BUT in the two month’s since March 23rd’s Record Low, the S&P 500 has risen 33%. (Putnam.com May 21, 2020 & Retuers.com May 21, 2020) I do not think any of us could have predicted this type of comeback given that essential the entire world’s economy was halted for several months. Although past performance is no guarantee of future performance, this goes to show ALL of us how quickly markets can change.
As your advisor, I understand the anxiety that market volatility causes you. I know it keeps you up at night and it is really difficult to not want to make changes. BUT many times it is BEST to tune out all of media hype and external noise and TRUST the strategy we have designed for you! Remember, we have designed your investment portfolio in anticipation of market corrections and volatility.
I recently saw a quote that stated “In timing the market to avoid the “BAD” days, we risk missing out on the opportunities of the “GOOD” days, too. “ (FMG Suites May 21 2020). And missing out on just a few of those “GOOD” days can really add up over the long term.