The short answer: yes. But let’s add some perspective. You may read a lot about volatility – or how much the market goes up and down – being the “new normal”. Covid surely isn’t helping any. But this “new normal” is simply normal. Volatility has been an integral part of the investing experience since the very beginning. As a perceived risk, it’s one of the reasons stocks have produced, and are expected to produce, higher returns than less volatile assets like bonds and cash. Risk equals reward, as they say. Over the years, we’ve had it better, we’ve had …
The Election: How to Position Your Portfolio
Depending on the winner of the presidential election, there’s something you’ll absolutely want to do with your portfolio. If Biden wins, you should… …do nothing. But on the other hand, if Trump wins, you should… …also, do nothing. Were you expecting a big secret? An actionable insight? Your portfolio doesn’t care who wins, because there hasn’t been much of a difference throughout history. This graph illustrates the point. It details how the US markets have done under each scenario back to the very first election (For this discussion, we’re omitting any other once-prominent parties. Apologies to any Whig party …
Last 77 Days: Economy Down, Market Up…Huh?
Why This Happens Since March 23rd, as you read this, unemployment has jumped off the charts (even after Friday’s report). More businesses have shuttered permanently. GDP forecasts have soured. The decline in industrial production was worse than any time during the Great Depression. Confirmed world corona cases have soared from 335,000 to 6,931,000. Deaths, from 14,700 to 401,000. All after March 23rd. Here’s an extremely, if not ridiculously, crude chart of all that bad news, alongside the return of the S&P 500 during that time: That’s a 44% gain for the S&P. To quote John’s mom, “It just doesn’t …
Frequently “Oaked” Questions
You Asked, So We’ll Answer FOQ: Can I lose all my money? Short: Nope. Long: We’ve all heard stories of someone’s cousin or whoever “losing it all in the market”. Here’s how that happens: Pick a stock, any stock, or maybe one you like (weed stocks are a popular pick these days, though slightly behind small pharmaceutical stocks racing for a virus cure). Put all your savings into that one stock, and if it’s anything like Enron or Sears or Pan Am or Lehman Brothers…poof! David Copperfield would be proud. For each of those high-profile bankruptcies, there are hundreds …