Today the market is reacting to yesterday’s Fed meeting, which of course is temporary. However, it does tell me that if there is a “reason” for another pullback, it’s likely twofold: One, the market is digesting Chairman Powell’s depressing and grim outlook for future growth; and Two, a potential rebound in Covid-19 cases. On that subject, the number of new cases appear to not be “spiking”, but have been accelerating over the past week. This of course has brought a renewed media focus (maybe we could argue an obsession) to the consumer sentiment surrounding this fear.
What do we do in reaction to this? We believe, in general, to keep a long term outlook as we continue to make small rebalancing and adjustments (tweaks). Typically, with new cash on the sidelines, we tend to buy on the big down days like today and continue a monthly strategy to put money in and take the emotion out of it. AND, we allocate funds each month to your cash savings (i.e. Emergency Fund) to help prepare you for downturns. Continue to pay down debt and build that long term foundation so that when future recessions happen, we are less surprised and better prepared.
That’s our job to help you focus on things outside of money, like your loved ones. Smiles, hugs (well, hopefully soon!), laughter, prayer, meditation, rest, and adventure are far more valuable to your quality of life than worrying about a short term portfolio dip. If you had of told me 3 months ago the market would be almost back to its highs, I would have laughed out loud (as the kids say “lol”). This just goes to prove the market can make a fool out of the smartest investors in the world, many of whom (some notable billionaires and hedge fund managers) pulled out to cash at the market low.
Stay healthy, enjoy life, turn off the TV, and let us know how we can help.