Down from the Highs

Over the past few months, we have seen volatility in many markets, stocks, bonds, alternatives, etc. Investors have looked at their portfolios and returns year to date and seen that they have gone down from where they were just a few months ago. A common reaction is to say that you have “lost” money in the markets. When we get these types of environments, we often think about what we should do, wonder if we need to make changes, or wish we would have done this or that. While these times can be challenging, they are often when shorter-term investment mistakes are made, and emotions get the best of us.

When we have times that our accounts come down from where they may have been, it is crucial to remind ourselves that perspective is important, and that we may well be up over time, but off the highs. For example. Let’s say you invested $100,000 several years ago. Over time it has grown to $150,000 and has done well. But now, with some market volatility, it goes down to $145,000 year to date. While you are down from the absolute high, you are still doing very well since you started. Plus, if you haven’t sold it, it is only on paper. I get it; we are wired to emotionally look at things that way and feel like we have lost something. However, long-term investing is a game of averages and can be bumpy in the short-term.

When we talk about the “rules” of investing, things like buy low sell high, diversity, don’t try to time the markets, practice patience, etc. often become tested when things are volatile. It is during these times that we hope to provide significant value to our clients and help guide them through the valleys so to speak. We are grateful for your trust, have strong faith in the plans we have built together, and are confident in the investment tools we are using to pursue your goals. Please give us a call with any questions or concerns you may have.

Investing involves risk. No investment strategy can guarantee positive results. Loss, including loss of principal, may occur. Material discussed is meant to provide general information and it is not to be construed as specific investment, tax or legal advice. Keep in mind that current and historical facts may not be indicative of future results. Diversification is an investment strategy that can help manage risk within a portfolio, but it does not guarantee profits or protect against loss in declining markets.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. (C) Twenty Over Ten