Staying Calm in Scary Times
We’re checking in with you because the week has opened with another scary drop in the markets.
Our main message is a simple one: whatever happens to your investments in the short-run, it will be fine in the long-run. Here’s why.
You’ve heard from us before that there’s no way to predict the future and therefore the only way to prepare is through built-in resilience.
When we assembled your portfolio, we didn’t know there would be a global pandemic. But we knew there’d be something. There’s always something. I’ve been around long enough to remember October of 1987 and Black Monday when the market experienced its biggest ever one day drop. The Dow was at 2,200 in those days. That was followed by the first Gulf War, the Dot-com meltdown, 9/11, and the Great Recession. I think we all remember that last one, how scary it was. No, how terrifying it was. We persevered, we survived, our portfolios came back. Now we have the Coronavirus pandemic.
Back to this idea of resilience. The stocks in your portfolio span the globe, they span every major industry, there are over 13,000 of them. They will only fail to recover if the World fails to recover. We don’t believe that’s possible. Human beings are resilient, they adapt, they always come back. So will your portfolio. And mine, for that matter, since I invest the same way you do.
And if you’re living off of your portfolio, you have seven years’ worth of spending in cash and bonds. Seven years. That’s a lot of time to give the World and Humanity a chance to come back from this. And not only will Humanity come back from this short-term dislocation, we’ll come back stronger than ever. When the Coronavirus turns some invisible corner, and the end is at least visible on the horizon, markets will come roaring back with a ferocity you can barely imagine. Anyone on the sidelines will miss it.
So, please stay safe, hunker down with your loved ones and watch movies and read your favorite novels, but don’t worry about your portfolio. It will continue to take care of you if you currently depend on it, and, in all cases, it will come back, along with a resurgent Humanity.
We’re thinking about you and all of your financial needs and making adjustments where they make sense. We’ll all get through this.