The Fear. Of. Missing. Out. If we are deeply honest, we all struggle with this, don’t we? I certainly do.
A client recently commented on our BLOG, thanking me for the risk-off move on February 28th, and then asked “when do we get back in? Or have we missed that opportunity?” He admitted that he was afraid we had missed out.
This is a great question and one we have struggled with, too. Hey, we’re human! So, let’s look at the data, especially in times like this we should let the data guide us.
Have we ever experienced a market like this before? Yes and no. Many markets in history have had large losses, then big rebounds, only to lose again. It is the speed of this current market and its circumstances have been unprecedented but the actions have not. Let’s look at this example.
This is the Dow Jones Industrial Average during the Great Depression. This index peaked in September 1929, lost 37%, and then rebounded 20% (called a Retracement) before losing a “ton” more. This is similar to what we are seeing today with one HUGE difference…we don’t know how the chart ends!
We believe with 20 plus million people unemployed in the US, a Global Pandemic still running its course, and a tremendous amount of potential unknowns that being patient and a little conservative is a good idea right now. No matter how aggressive you are, you can and should wait to make the best next move. The markets and the economy will recover and we will have tremendous opportunities in the future. We do not think that we are in a new “Great Depression.” However, right now, this is an unpredictable and volatile market. The traders and news reporters are having a field day, but the rest of us should be patient. We are studying what that move should be following all of the data within the four areas of our framework. This gives us a definitive next step, but because of the unprecedented nature of these times, we will be mindful of when to take that next step.
We appreciate your trust in us!
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.