The broad US stock market just experienced its 11th-worst 6-month period since 1971. It’s always possible that markets get worse before they get better. Yet, history has shown that stocks tend to do well following a [very] bad stretch.
It is with extraordinary joy and satisfaction that Austin Colby and The Wealth Group welcome Karie Merritt officially as an equity partner and owner of the firm!
As investors, there are always reasons to be cautious and reasons to be optimistic—often simultaneously. The bears and the bulls both have valid points. But to be a successful investor over multiple decades, it pays to remain optimistic.
I bought my trusty 2007 Toyota Yaris in October 2012 for $9,300 with 32,000 miles on it. Today, it has 114,000 miles--plenty of life left to live. While I have intended several times in the past to replace the vehicle for one that will better accommodate a family with five young children, the process has not quite gone according to plan.
There are about 253 stock market trading days per year. Over 20 years, that equates to 5,060 trading days. If you missed the 10 best days out of those 5,060, you only missed 0.2% of all the trading days (one-fifth of one percent), yet your returns would have been reduced by over 50%.
The Wealth Group team is excited to have been named on Forbes’ “Best-In-State Wealth Advisors” list for the third consecutive year.
The Colby family van (affectionately called “the Party Bus”) was recently totaled in a car accident. Thankfully, there were no major injuries to the passengers, but it was a complete wreck of an excellent motor carriage that had faithfully transported my family 130,000+ miles over the past eight years. Once the shock of the accident had worn off, I began the disheartening task of finding a replacement.
Introducing the newest team member at The Wealth Group: Jaron Kissner.
tl;dr version: Americans are very pessimistic right now. This is a contrarian indicator. Stocks have an 84% chance of being higher 12 months from now. It might take some time, but forward-looking return prospects are good when folks are discouraged. The average 12-month forward return in past instances like this is +15%.
A stock market correction is defined as a 10% decline in the market. We officially entered a correction earlier this week. We recognize that most of our clients are seasoned, savvy investors that do not hit the panic button after a correction. We are always impressed at how calmly the bulk of our clients handle recessions and even bear markets. That said, it’s still painful for all of us (advisors and clients alike). We know our clients are not immune to being troubled over market downturns – particularly when coupled with troubling geopolitical events.
How about getting your mortgage paid off before turning 35? Sounds great, right?
January is going down as a tough month in the markets (putting it mildly). As I write this article on January 31st, 2022, the US stock market is down about 6.5% for the month. That is not one of the 15 worst months in US stock market history since 1950, but it’s a bad one.