Doug and Sarah provide historical context to help make sense of current market conditions. Slides referenced in the video can be viewed below.
Many of our clients have expressed their anxiety about the recent state of the market. The market has demonstrated a great deal of volatility. In fact, this year, we have seen more extreme trading days than we have since 1987. For many investors, this can cause panic, and the impulse is to sell.
However, we urge calm and would remind you of the old adage to “buy low, sell high.” It may not feel “good” to be buying stocks right now. However, when we widen the lens and contextualize this moment historically, we know the market will recover and continue to climb. According to Brian Wesbury, the chief economist at First Trust, the stock market is currently “fairly-valued.” That means there is an equal chance it goes up or down from here; further, “a stock market at fair value should be expected to rise over time.”
Speaking of time horizons, we know too that, over time, investors who maintain their positions in stocks perform better than those who pull out or “panic-sell,” that panic-selling negatively impacts performance over time. Those who try to “time to market,” by changing their investments according to momentary shifts, perform more poorly than those who maintain their investments in quality companies.
As your financial advisors, we monitor day-to-day market trends, but are careful to keep shifts in historical perspective. The market will inevitably take dips, but it will invariably rally. That’s why we encourage you to trust us, (and keep in mind that investors who work with financial advisors perform better than those operating independently*). We are confident in our carefully selected and managed portfolios.
We understand how worried you may be, and why, and we want you to know that we are here for you as sounding boards as well as advisors. If you are experiencing market-induced stress, we encourage you to schedule a time to talk to Doug or Sarah. Please contact Alexis at 717-232-6974 or aminana@charneyig.com; she will arrange a time to talk. Above all, keep calm and carry on.
*Per Vanguard, one of the world’s largest brokerage firms. Vanguard determined the value of professional investment advice to be equal to approximately 3% higher annual returns.
