2019 was a wonderful year with the Dow Jones Industrial Average producing a 25.3% return. We have had 11 years of a bull market and eventually there had to be a downturn, we just didn’t know when or how. Well, the Coronavirus has just put us into a new Bear Market this month. When Financial Plans are put into place, based on your risk tolerance and goals, these types of Bear Market downturns should be planned for and expected. Although your account values will be down, historically they also have gone back up. After living through the 1987 crash, the 2000 Technological Bear Market, and the 2008 Real Estate Bear Market, this is not something new, just different. They all are always different. The downturns are painful, but only affect you if you were to sell and exit the market. By diversifying your accounts, with the Managers who have track records of doing well in good markets and not going down as fast in bad markets, and having an asset allocation in your accounts based on your long term goals and objectives our firm does all we can to help minimize volatility to the extent possible. The graph below gives us hope for the other side of this drop.
This too will pass. Now is not the time to try and time markets and the good news is that you don’t have to with a proper plan in place. We have planned for this. We just need to trust our models and our portfolio managers to do their jobs for us.
My main concern for all of you is to stay healthy, so be careful out there and use lots of hand sanitizer. Avoid large groups and stay safe.