April 23, 2020

Dear Friends:

As of my writing this article on April 3, 2020 the S & P 500 closed down from the February18th high of 3380.16 to 2488.58 about a 26.4% drop in about 2 months. These are markdowns which you historically do not see more often than about one year in five on average. The drop was dramatic to say the least, and now the great companies in America and the world are at a deep discount.

We should focus on sale prices, and look ahead to better days which have historically always come next.  One cannot predict when and where this sale will end, or where the bottom will be. Here are a few things to keep in mind while we are experiencing this trough in the markets:

  • Time in the market is better than timing the market
  • The real compound return of equities has been well over twice the real return of bonds
  • The average post- war bear market decline is about 31%
  • The only way to be able to achieve permanent advances of equities is to be willing to ride out their full temporary declines
  • You need to be in it to win it: Continue to consistently invest money regularly into the diversified portfolios that were designed for you!
  • The more (and the longer) public sentiment is negative on equities, the longer and higher the secular bull will run

In the meantime, be safe, healthy and well. As always, I am here if you need me.