TLDR: Navigating the Market and Your Plan
Updated: Mar 26, 2020
I wanted to do a TLDR (too long, didn't read) version of all of the articles and blogs I've been reading over the past few weeks as we navigate the current bear market.
Here is the written summary and links to the three posts I talk about in this video.
1. Josh Brown - Hello Darkness, My Old Friend
TLDR; "So, when people ask me what I’m doing or what we’re doing for clients, I don’t have to think very hard. We are communicating for clients, not speculating or making bets with their money. Our rules-based strategic asset allocation portfolios had us rebalancing. So, we are not trying to anticipate “the next shoe to drop” or “looking for buying opportunities” or any of that. You set the rules in advance at a time of no emotions, so that you’re not succumbing to emotions and trying to guess at what to do in an environment like this. The most valuable conversations happening among our advisors and clients this week are not about the spread of a virus or the next moves the Fed might make. They are about whether or not any of the clients’ goals or objectives may have changed. They are about affirming how much or how little risk is being taken, and why. They are about contingency plans for spending needs and the tax impact of asset location and other non-sexy but essential topics that are the cornerstone of these relationships."
2. Ben Carlson – How Long Does It Take To Make Your Money Back After a Bear Market?
TLDR; The longest breakeven in the modern era (which I consider the post-WWII time frame) was the aftermath of the dot-com crash, which took four years in total. Surprisingly, the recovery following the Great Recession took just 3.1 years. The average breakeven since 1928 was 26 months or just over 2 years. In the modern era, the average was just shy of 17 months or around a year-and-a-half to get back to even. Half of all bear markets have seen break evens lasting less than a year while one-third have taken 2 years or longer.
3. Ben Carlson - 12 Things That Won’t Help You During a Market Correction
TLDR; (What won't help is...) What other investors are doing with their portfolios. One of the biggest mistakes you can make as an investor is confusing your time horizon or risk profile with someone else’s. How other people invest shouldn’t concern you because no two people operate their portfolios under the same set of circumstances. And even if this was the case, your personality can alter your ability to take risk in comparison to others.