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Bear Markets are all Similar, but the Problems Always Hurt

When we are in them – bear markets, that is – the anxiety is so high. While by some measurements
the recent bear market we experienced is technically over, many people are still anxious that it could
return. And this time the anxiety isn’t just financial. We have the worry that those we love might get
sick with a virus that is still very unknown.
First, let’s define and discuss the “average” bear market. For a market to be defined as a bear market
means that it has declined by 20% or more. The average decline of all the bear markets since the end
of World War II is 30%.1 And they have happened on average every 3-5 years.
We have lived through several extremely scary bear markets. The ones that stand out happened in
1987, 2001, and 2008-2009. And of course, the recent bear market caused by the COVID-19
pandemic. Let’s look at them all a little closer.
Every time the best companies in America decline by 30% or more, it felt like we had never been
through a time like this. How will this end? When will it end? What if it doesn’t end? Well, we
don’t know the answers. We aren’t embarrassed by that because no one else does either!
We don’t know the health solutions. We don’t know how earnings or dividends will be impacted.
And, for a while, we don’t know the true value of the greatest companies in the world. But let’s look
at the last three times we felt like this. We’ll go through the ones we remember clearest first.
In 2008-2009, we experienced a financial crisis (versus the current health crisis). Credit completely
dried up. This caused a bear market that was worse than anything we’d seen since the Great
Depression. The market’s fall from peak to bottom was over 50%.2
But as with all worldwide problems, financial or health, the great minds work to solve them. The
Federal Reserve and their equals around the world became the lenders – just as they are supposed to
be! Credit became available again. Some financial companies ceased to exist, true. Some companies
dependent on credit got government aid – aid that was paid back. But the market declined. Investors
were anxious, and in many cases, were terrified. But the problems were solved over time. And the
market recovered – and went on to greater heights than ever before. (And this is why when someone
states, “I can’t go through that again,” we ask, “But why?”)
On September 11, 2001 we experienced the unimaginable: attacks on our soil. It seemed this might
be World War III. We were scared to see anything else in the sky and worried about other attacks at
home. Where were the terroists hiding? Could we experience biological or nuclear attacks? The
financial markets closed for nearly a week and we thought things would never be the same. But,
being Americans, we mourned, we removed the rubble, and we got back to living. The markets
recovered fairly quickly.
Anyone who worked in the financial industry at the time will never forget the beautiful Monday of
October 19, 1987. Back then, we didn’t have online tickers or computers with prices. We had to call
a trading desk to learn about the movement of the market. We could not believe the answers we got.
Our phone didn’t ring off the hook because our clients didn’t have tickers either. They didn’t know
what had happened until they came home form work and turned on the evening news.
That infamous day is now called Black Monday. The Dow dropped more in that single day than it
ever had before, to the tune of 22%! It felt like a crash. It felt like a Depression. But it turned out it
was the failure of some financial instruments that didn’t make good sense in the first place.
Right now, sitting safer at home, we feel anxiety is at even higher levels because we can’t go about
our normal daily routines. And different than that day in 1987, we all know the movement of the
market minute by minute just by pulling out a device in our pocket! So, given that anxiety, it’s hard
to believe this will ever end. But it will end, because it must.
Remember, while the solutions aren’t happening as fast as we want in this world of instant
information, we know that scientists, medical professionals, and epidemiologists are working to find
treatments, therapies, and a vaccine. When? We don’t know. When will the curve flatten? We don’t
know. How long will we social distance? We don’t know. But eventually this will end. And the
world will go back to living. In America, and around the world.
The market will recover and advance. (If history is any guide.) But then there will be another
unimaginable crisis. It’s the nature of the world. It’s the nature of the market and owning what we
need to meet our goals and dreams.
But as much as the other events have moved to the back of our memories, and the markets have
moved back to where they were - and even higher again and again – it’s natural for investors to
believe that this time is different. It’s not. The cause may be different because the cause is always
different. But the pain is the same – and the triumph of overcoming that pain will be the same, too.
The next time we write about a crisis, we will likely reference this one. Eventually, this will feel as
far distant as 1987, or even 9/11. And we will remember once again that the best reaction to a bear
market is no reaction at all.
1 “8 things you need to know about bear markets,” CNBC,
“United States bear market of 2007-2009,” Wikipedia,
“Black Monday (1987)”, Wikipedia,
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This Has Been Hard

How are you doing? Are you holding up ok? These are the two questions we find ourselves asking friends, family, and co-workers daily. There is no doubt about it, 2020 is going to go down in the history books as a difficult and challenging year for many. Many closed their businesses or are working remotely. Others are isolated at home away from loved ones.  And many work the front lines of this global pandemic.  We’ve seen downside volatility and uncertainty in the markets and investment portfolios, and a strong economy has taken a hard hit. Economic and physical health concerns can take a toll on our mental health. We’ve been hit with a lot!
It’s hard being away from loved ones. It’s hard not giving your mom a hug or holding hands with a grandchild. It’s hard to be away from church gatherings or to miss seeing your child’s high school graduation. It’s hard to close your business to stop the spread, and we can only imagine how hard it is to worry about where the next meal will come, like so many families across the country are. It’s hard not knowing when things will return to “normal.” There is no doubt about it. This is hard. 
Are we out of the woods yet? Are good days right around the corner? We wish we knew the answer, but we don’t and, no one else does either. Do we still have faith in the future? Absolutely! We believe very strongly that out of the gloomy clouds of fear and uncertainty, we will see a bright future in the world and markets alike. Hard times have come before, and hard times will come again. In every hard time our country has faced, we’ve always come out stronger and better prepared for the road ahead.
We plan for bumpy markets in every financial and investment plan that we create. We know there will be downturns along the way. We pride ourselves being there for you during moments of market uncertainty, and uneasiness…truly this is when we earn our keep. This is hard, and these times are scary.  Always remember, we are here for you. If you need someone to talk too, we are here. Of course, we are always available to discuss your investment portfolios, but we are here to talk about anything. If you need help getting groceries or medical supplies, we are here. We are all in this together! Hang in there, and remember we are just a phone call away!  
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Days vs. Decades? Fear vs. Faith? Despair vs. Hope?

As we celebrated Easter a little over a week ago, I realized we have our folks focus on the decades.  Because only occasionally do days mean a lot. Like the three days between Despair and Hope. Hate and Love. Those three days meant so much because they meant eternity. There are other times when a day means a lot. Wedding Days. The Day a Baby is Born. The Day a Grandchild is Born. The Day we Retire. Those days mean love and joy for many decades. 
Often when you ask us, should we do something. We ask have your dreams changed? Has your life changed? Have those days that mean the most to you changed? Headlines will scare you into thinking all the things I care most about are now in danger…there is despair. I’m afraid that there is not hope. That I don’t have the days needed.
Our easiest answer would be to tell you, let’s do something. You will feel better if you do but we know doing something can ruin your plans. We know that there will be wolves in sheep’s clothing, telling you there is a more comfortable way. There isn’t. 
Reaching all the things we want most in life require time, faith, and hope in the future. We know those are requirements for the most important things of life. 
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National High Five Day

Each year on the third Thursday in April, we observe National High Five Day. Typically, this is a fun day where you can “High Five” everyone that you see.  🙌Of course, it’s a little different this year.
We can’t exactly High Five each other right now, so know that we’re sending you a virtual one. We’re especially high-fiving our local and national USPS workers right now. From the census to the November election, the Postal Service is critical to American democracy and day-to-day function.
Like so many businesses, the United States Postal Service has been hit hard by the coronavirus. Mail volume is down nearly a third over this time last year and continues to fall. These men and women work tirelessly to fulfill our essential need for the postal service. 
This year, the Postal Service is also playing an expanded role in sustaining democracy. In the new world of social distancing, mail-in and absentee voting are crucial to ensuring that Americans do not have to risk their lives to cast their votes.
Whatever your hobby is right now, see if you can turn it into a sweet Thank You for your local postal worker. Maybe sew them a mask, make an ear-saver for those pesky mask straps, or even a carefully-made bag of baked goods. Let’s show them how much we appreciate their unwavering dedication and service.
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Straight from the Heart

Today, I write again,  straight from the heart.

I could tell you about statistics. I could tell you about my call with economists yesterday.

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