Where in the market are we going to look to help combat a negative 12-year nominal return?

This question is terribly negative. So, let’s see if we can lighten our mood a little!

Last week we unpacked Dr. Hussmann’s article which predicted a return of -0.95% over the next 12 years in a 60/40 model. It would appear on the surface to be doom and gloom as you look at the S&P500. However, as a client of Sound Financial, the S&P500 is not what you should compare your accounts to. Our investment framework follows a set of rules and trends and this allows us, in our opinion, to be where history has shown returns. When we look back at the year 2000 there are many similarities. Clearly, the big difference is in 2000 there was not a global pandemic. 

The rest is good news! Because, we can look in history to find similar markets, i.e. 2000. We then look into the 2000-2010 decade, breaking this research down thoroughly, to determined what worked in that period. We can then build your investment models to take advantage of what we think will grow well now and in the near future. Because “history doesn’t repeat itself, but it often rhymes,”[1]this gives us a lot of confidence in what we are seeing and interpreting in the markets. However, this process does not guarantee results, but in our opinion, it will help put you, our clients, in the best possible position for your financial future.

What should investors or clients be looking at or following based on where we are in the market cycle?

That’s depends on your personality, capacity, and interest. You should not feel obligated to watch anything regarding the markets. For example, Danny Matthews is one of the founders of Sound Financial Strategies. He managed money for over 30 years and now as a retiree he rarely studies the market. However, if you want to watch the markets our weekly VLOGs, quarterly webinars, and calls with your advisor are meant to provide you essential education. Beyond this, we believe this advice should be tailored to you. So, please ask your advisor what news or benchmarks are best for you to follow.


Investment Advisory Services offered through Sound Financial Strategies Group, LLC (SFSG), a Registered Investment Adviser. Certain representatives of SFSG are also Registered Representatives offering securities through APW Capital, Inc., Member FINRA/SIPC, 100 Enterprise Drive, Suite 504, Rockaway, NJ 07866 (800)637-3211. SFSG and APW Capital are separate and unrelated companies.
The opinions expressed are those of Sound Financial Strategies Group, LLC (“Sound”). The opinions referenced are as of the date of publication and are subject to change without notice. The visuals shown are for illustrative purposes only and do not guarantee success or a certain level of performance. This information is not a recommendation to buy or sell a particular security or to invest in any particular sector. Forward-looking statements are not guaranteed. Sound reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs, and there is no guarantee that its assessment of investments will be accurate. Information was obtained from third party sources which we believe to be reliable but are not guaranteed as to their accuracy or completeness. This information is not intended to be investment advice and does not take into account specific client investment objectives. Before investing, an investor should consider his or her investment goals and risk comfort levels and consult with his or her investment adviser and tax professional.
Sound is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Sound’s investment advisory services can be found in its Form ADV Part 2, which is available upon request. SFS-20-127
[1]Mark Twain
Financial Planning

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