The Only Certainty in Life is Uncertainty
What a year 2020 has been! We are a couple of months past the halfway point, and it feels as though we have had a decade’s worth of headlines crammed into just a short seven and a half-month window. This year has been anything but smooth, as investors, for many physically or many financially. All around 2020 has brought more than a fair share of challenges. But we have made it halfway! And while uncertainty is still alive and well, we would remind you that in life, the only certainty we have is uncertainty (for those of you who have known us for a long-time, you have heard us say this for years).
With that truth, it can make sticking to a financial and investment plan more difficult…especially during challenging times in the market like we saw earlier this year. March and early April caused volatile downward swings, late April, May, & June had volatile upward swings in the market.
For many of you, the thought of reacting to the drops or scary headlines was strong. Doom and gloom was in the air with no end in sight. There wasn’t a clear path forward, and it seemed as though this time indeed was different (remember, ‘this time is different’ are the four most dangerous words an investor can utter). But then, late April and early May rolled around; the markets began to rebound...and rebound quite quickly. Just a few months prior, we witnessed the fastest bear market decline in the history of the markets only to be followed by the most rapid 50-day rally in the markets. Like we said in the opening paragraph…what a year 2020 has been?
So what lessons can we learn from 2020 so far? How do we move forward from here?
For starters, 2020 isn’t over yet. The pandemic does not appear to be going away anytime soon. We are also in an election year, and the political rhetoric from both sides will only continue to grow and amplify as we get closer to election day. (If you’d like to know the history of market reactions to elections, let us know. We can send you some literature. You will be surprised.) We believe that the first half of 2020 is an excellent example of why it is critically important to have a financial plan with an investment plan as the means to the ultimate goals of that plan. Your behavior around your plan is much more important to financial success than reacting to headlines and current events. Reacting to the headlines of late March would have been very tempting to even the most seasoned investor, but if you take a look at where things stand now, just a few months later, it’s clear to see that reacting would not have been the best course of action. And it could have been detrimental to your long-term goals. Staying the course is not always an easy thing to do, but history has shown us over and over the importance of reacting by NOT REACTING. And that’s why we earn our keep in the most challenging times.
Join us on September 1st, 2020, for a webinar. Our investment partner, American Funds and Capital Group, will present, A Way Forward: Investing in an Uncertain World. While we wish that we could get together in person for this workshop, we don’t believe that would be prudent! But thankfully, technology will allow us to get together in an environment as close to in-person as possible!
2020 will be a year that none of us forget. Please know that we are here for you anytime you have questions or need to talk to someone. Thank you again for your continued trust and confidence in letting us help you reach for your dreams and goals!