By Sheryl Sutherland
There is no sugar coating this: we are now in the 13th bear market since the late 1920’s with losses of up to 30% in some areas. And this is against the backdrop of all the current threats facing humanity: global warming, nuclear war, rogue biotechnology, terrorism and the unknown that is artificial intelligence. There is an ancient curse I often quote ‘May your life always be interesting’, it surely feels like that is applicable to our current situation. None of us can see past this pandemic, we have all developed a siege mentality, perhaps the worst is yet to come. Yet if we look to China and Korea we can see the beginnings of recovery with markedly fewer cases and those countries are rapidly getting back to work.
Not to minimise the decline, but the S&P 500 is still up around 150% over the last ten years.
Not to minimise the decline but stocks are trading at approximately the same place they were last August.
Not to minimise the decline, but the S&P 500 declined 4% or more in a single session more than 50 times since 1950.
Not to minimise the decline, but stocks fell 89% in the Great Depression , 50% in the dotcom bubble, and almost 60% in the Great Financial Crisis.
Not to minimise the decline, but expected returns go higher as stocks go down.
Not to minimise the decline, but any financial plan that can’t withstand a decline in stocks was never a real plan to begin with.
Not to minimise the decline, but if stocks weren’t risky they would never go down, and if they never went down they would never go up.
The bad news is I have no idea if we are at the bottom of the market. Maybe today, maybe in a week or a month. Its is going to come at some point. This feels like the worst time ever to buy shares – that’s usually a good sign. The recovery will come and when it does the uptick will be massive.
Remember I am always available if you need further information or just want to talk. Keep your self, your loved ones and your community safe.
The Financial Strategies Group
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admin@strategies.co.nz
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