Key Takeaways:

  • You have a Plan
  • Timing the market doesn’t work
  • Staying the course IS an action
  • Diversification works
  • Market volatility can create opportunity
  • We are always here to help

Economically speaking, we know that it feels a bit like the end of the world right now.

Are things pretty uncertain at the moment? Obviously.

Does the horizon look pretty gloomy? Undoubtedly.

Until this trade war is behind us, the craziness will probably continue.

And it may be a while.

But you know what? It’s all going to be okay. We mean that most sincerely.

We don’t know when this will all be over, but to this point in history, there has never been a good time to make a long-term bet against the great companies of America and the world.

I’m not sure how many times investors need to learn that lesson before it finally sticks, but it might be the most important lesson from market history.

Maybe the reason why it hasn’t stuck is because one of the other lessons from history is that people do not learn from history. We don’t have to let that be us.

Regardless, it appears that President Trump has thrown a wrench into the market for the time being.

Or, at the very least, it seems like the market—and mind you, this is the same market that seemed to cheer President Trump’s election victory—is having second thoughts about his revitalization of a century-old playbook.

In any case, we’re not sending you this note to talk about President Trump or tariffs, or to tell you that we know what the future holds. Politics and investing don’t mix very well, so we’re not going there either.

But because nearly everyone we have spoken to (both Republican and Democrat) seems to be concerned right now, we wanted to share a few things that I hope offer comfort in the midst of the storm.

  • 1
    You have a plan.
    We’ve prepared for this. Maybe not for this exact situation, but one like it. The catalyst could have been anything, but here we are. We’re ready. You’re ready.
  • 2
    Timing the market doesn’t work.
    Avoiding the market’s downs may mean missing out on the ups as well. Good days happen in bad markets. Missing the market’s best days is extremely costly. If you missed the best 20 days of the S&P 500 from January 2003 to December 2022, you would have reduced your return by more than 70% [1].
  • 3
    Staying the course IS an action.
    It’s a natural instinct to want to make significant changes to your portfolio during volatile times, but, in the words of famous investor, Jack Bogle, “ don’t do something, stand there!”  In other words, the best strategy is to determine a long-term plan and stick with it and ignore the urge to “do something.”
  • 4
    Diversification works.
    The vast majority of SWA clients own non-stock asset classes, including fixed income (bonds) and alternatives.  This diversification works and has helped soften the below of these recent down markets.
  • 5
    Market volatility can create opportunity.
    Market pressure can provide some of the most compelling long-term investment opportunities for those who can control their mindset, remain calm, and be consistent psychologically.  If you have cash available beyond your emergency fund, this can be an opportunity to buy great businesses at discounts.  Warren Buffett emphasized that “A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.”
  • 6
    We are always here to help.
    You are being bombarded by headlines, comments from friends and family, and a tornado of uncertainty. We are always here to help revisit your financial plan, offer perspective, and provide balance and consistency to help manage fears and emotions.

Sincerely,

Eric and your Saling Wealth Advisors Team

[1] Source: JP Morgan Asset Management. The dollar amount shows the performance of a $10,000 investment between January 1, 2003 and December 31, 2022. Returns are based on the S&P 500 Total Return Index. Slide in BNY Investments: Investing for the Long Term

Eric Saling, CFP®

Senior Wealth Advisor

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This material is not financial advice or an offer to sell any product and is not a recommendation to buy or sell any particular security. The opinions expressed are those of the Saling Wealth Advisors’ Management Investment Team and are subject to change without notice.

Saling Wealth Advisors (“SWA”) is an independent SEC registered investment advisor. Registration does not imply a certain level of skill or training. This material is provided for informational and educational purposes only. More information about SWA including our advisory services, fees, and objectives can be found in our Form ADV Part 2A, which is available upon request.

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