Here’s some fun trivia for you to share with your friends as we head into the weekend:
Did you know you have to count to 1,000 before you’ll find the letter “a” in a spelled-out number?
We thought you could use that break from the deluge of mid-year news events and stock market commentaries on 2020’s bipolar extremes. The general theme has been how quickly global markets sold off and came back – even as economic and sociopolitical headlines continued to stoke bonfires of ongoing upheaval.
And the year is only half over.
We’ve seen comparisons to Rip Van Winkle, who could have slept through the extraordinary turmoil and awakened in June with only minor changes to the US stock market. We’re also seeing predictions that diversified portfolios have entered into a lost decade of paltry performance. Still, other forecasters (perhaps to cover all grounds) suggest we’re in a time with “equal reasons for caution and optimism.” No kidding.
So, what’s it going to be for the rest of 2020? As always, with respect to your investments, we have no idea what to expect between now and year-end (because we can’t know what will happen). Instead, we agree with Jason Zweig, who wrote this in his recent “Intelligent Investor” e-newsletter:
“The first half of 2020 should remind us that investing isn’t about conquering markets; it’s about mastering ourselves.”
In this context, perhaps our trivial pursuit is not so disconnected after all. We know markets are highly likely to outpace inflation for those who can patiently “count to a thousand” while riding out the inevitable downturns. We also know investment success can take longer than you might think – potentially much longer.
Similar to what you might have first guessed about the elusive “a” in our numbering system, the initial assumptions we make about investing are often off-target until we take the time to think them through. As such, we continue to remind you of the evidence on how to persistently participate in markets, regardless of the short-term noise. We also continue to recommend allocating your hard-earned funds appropriately (for you) between the market’s higher-risk, higher-expected-return extremes, and the sheltering calm of more stable, but lower-returning holdings.
If you feel that any of this needs to be revisited for you, let us know so we can help you take another look at your ideal allocations if needed. In the meantime, let others “conquer” the markets, as you consider these additional words from Zweig:
“To be an intelligent investor is to recognize that you’re in a lifelong struggle for self-control – an unending effort to keep yourself from yielding to fear or greed, believing that you know what the future holds or letting short-term news knock your long-term plans off track.”
Again, let us know if we can help you and your financial plans remain on track.