Stay the Course


Many years from now, God willing, my grandchildren will ask me, “Grandpa, where were you the day they announced that Forrest Gump had COVID-19?”

Isn’t it astounding how quickly narratives change? We all knew 24 hours ago that the market was correcting because of a global flu pandemic. But how bad could it possibly be? Opinions ranged between it being a hoax to a major crisis underway.

And then Trump banned travel to Europe. The NBA cancelled its season. Tom Hanks became the first celebrity to get hit with coronavirus. Now the virus had attacked who my kids think of as Sheriff Woody – an American icon. Things just got personal…and scary. The narrative snapped into focus and we learned overnight that this bear market will be with us now for some time.

My sincere advice is to turn off the news and not check your accounts until the Coronavirus runs its course.

Bear markets happen. We can’t predict the reasons in advance. And in the short-term, the effect on your portfolio can appear devastating. History and my own experience have taught me that economies and markets always bounce back, typically stronger than ever. Never underestimate human resilience. Pessimism sounds smart, but it’s optimism that makes money.

You may not want to buy right now, but I wouldn’t sell. That’s how you make a temporary loss permanent. Ceding to panic is how we make mistakes. If history is any guide and taught us anything, it’s that staying the course is your best method of weathering the storm. I’m confident that years from now we’ll be glad that we stuck to our plans.

We’ve been through worse. Problems are temporary, but progress is permanent. Keep your courage and your wits. This might not be the advice you want to hear, but it’s the truth.

For solace, count all the money you have outside the bear’s reach. Your cash, bonds, annuities, etc. Do the math. It’s likely years of income. You have what you need to be patient for as long as it takes. And if you have your health and/or love in your life, you are still wealthy beyond measure.

Stay the course,

Mike

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