March 2020 Newsletter to Clients

The Market In Perspective

There was a headline last week regarding the stock market’s drop titled, “How to Steer Your 401(k) Through Choppy Markets.” It seems to us a better title might be, “Your Portfolio Is Charting the Right Course, Hold Steady Through a Few Bumps.”

One of the biggest mistakes an investor can make is view an investing horizon as days or weeks. As you know, we craft our clients’ portfolios to meet your individual needs. Already retired and relying on your investments for income? Your portfolio and the underlying investments are designed for that. Still a couple of decades away from withdrawing money from your investments? Your portfolio is set toward that horizon.

Much focus, and hand-wringing, was on the drop of the U.S. stock market last week. Yes, an 11.6% drop in the S&P 500 – an index for the largest U.S. companies – is dramatic. But fear is an extremely poor investing trait. A steady, long-term view, however, is effective and pays off in the long run.

All the drama and angst over the stock market drowns out the fact that our portfolios consist of a wide range of mutual funds, some of which are not invested in the U.S. stock market. Here are some numbers for perspective:

• S&P 500 stocks:
  • Year-to-Date Return: -8.27%;
  • 12-month Return: +8.18%
  • 5-Year Average Return: +9.21%
• International Stocks (MSCI World Index):
  • Year-to-Date: -9.01%
  • 12-month Return: +4.63%
  • 5-Year Average Return: +5.88%
• S&P Real Estate Index:
  • Year-to-Date Return: -5.01%
  • 12-month Return: +9.39%;
  • 5-Year Average Return: +5.80%
• U.S. Aggregate Bond Index:
  • Year-to-Date: +3.76%
  • 12-month Return: +11.61%
  • 5-Year Average Return: +3.69%

Better decisions are made when we focus on decades rather than days.

Thank you for your continuing confidence.