Your browser does not support JavaScript
 

Blog & News

Market Update, March 23, 2020
Posted By:  Dave Wilder CFP®, CTFA, MST, AIF®, CEPA
Monday, March 23, 2020

Market Update, March 23, 2020

In these moments, our most important job at Total Wealth Planning is to ensure our clients continue on the appropriate course with their investments. Doing so will help to ensure that goals such as continuing to meet current living expenses, retirement and college savings, wedding plans, and others are kept on track. By continuing to stay disciplined and by maintaining the investment approach we have structured, the chances of attaining these goals will go up dramatically. Those who do not continue will likely need to delay their goals for years, if not longer.

This may be the most important email you receive from Total Wealth Planning. Forecasts suggest COVID-19 and the resulting economic impact could get worse before it gets better. As challenging as these times are, however, this is also the most critical time to maintain the current structure of your investment portfolio. The investors who are most likely to see their portfolio values fully restored within a reasonable period of time will be those that can continue to maintain the discipline of holding on to their current investments, and not sell. Without a doubt, there will be many investors who cave in to the pressure and will sell at the worst possible time. These investors will most likely not participate in the recovery when it occurs and they will be the collateral damage of this market decline.

There are examples in history where markets have experienced dramatic declines, from which we can draw useful comparisons. One of the most severe was in the year 2000, when the NASDAQ index (an index comprised mostly of technology stocks) dropped a whopping 76.81% from its high on March 10, 2000 until it hit bottom on October 4, 2002. It took over a decade for that index to recover. Again in 2008, most major stock market indexes dropped 50-60% in value and took 6-8 years to fully recover. By comparison, an appropriately diversified portfolio was able to recover in both of those circumstances within a year or two. Importantly, in the meantime, the underlying investments generated the necessary income for retired investors while allowing for resilient growth for investors who were trying to meet other savings goals.

Although we had no way to foresee this decline, we were prepared for this type of market event. While other investors often focus on generating the highest rates of return, we continuously strive to provide competitive returns while focusing on mitigating risks. For this reason, we consistently maintain a significant weighting to the bond asset class. Most important, we have always focused these holdings in low risk, short-term, high quality bonds. The result is that these holdings help to mitigate volatility that would otherwise be experienced. Furthermore, with bonds providing stability to the portfolio, there will be no need for our clients to tap into their stock investments for several years. The end result, just like in 2000-2002, as well as in 2008-2009, portfolios will be restored much more quickly than they would otherwise.

Understandably, it would be much more comforting if we knew when the markets would rebound. With measures underway by the government to stimulate the economy, along with multiple efforts by scientists to find a way to reduce or eliminate the impact of the virus, it is possible that we are at the cusp of a recovery. However, the uncertainty may continue for a while longer. We have no way of knowing how quickly and how significantly these measures may help to improve things. We know attempting to time the markets is always futile and has consistently proven to be a fool’s errand. A recovery will happen at some point, though, and when it begins, it will likely happen quickly and dramatically. Looking back over the last few weeks, anyone who may have suggested that markets would fall to these levels this quickly would have sounded delusional, especially since the economy had been experiencing tremendous strength. A decline has nonetheless occurred. It bears repeating, investors who do not stay the course will mostly likely not participate in the recovery when it occurs and they will be the collateral damage of this market decline.

We have your best interests at heart in order to keep your financial health in order. We ask that you keep yourself and your loved ones safe and in good personal health during this time.

If you are not a client of Total Wealth Planning, and you would like additional information about our firm, please do not hesitate to contact us.





 
 
Subscribe To Our Blog

Blog Categories

  • In the News
  • Business Owners
  • Charitable Planning
  • Client Experience
  • College Planning
  • Estate Planning
  • Executive Compensation
  • Firm Updates
  • Investments & Market Updates
    • 04/06/2020 - Quarter 1, 2020 Market Review
    • 03/31/2020 - Humans Are Not Wired for Disci
    • 03/23/2020 - Market Update, March 23, 2020
    • 03/16/2020 - Market Update March 16, 2020
    • 03/11/2020 - Market Update March 11, 2020
    • 02/28/2020 - The "Health" of Your Portfolio
    • 01/08/2020 - Quarter 4, 2019 Market Review
    • 12/03/2019 - Less Cash in Your Portfolio Yi
    • 10/04/2019 - Quarter 3, 2019 Market Review
    • 07/05/2019 - Quarter 2, 2019 Market Review
    • 04/12/2019 - Quarter 1, 2019 Market Review
    • 04/11/2019 - Looking Beyond Average Investm
    • 03/12/2019 - Dimensional Fund Advisors – A
    • 01/24/2019 - 2019 Annual Limit Changes
    • 01/08/2019 - Quarter 4, 2018 Market Review
    • 12/12/2018 - Why Should You Diversify?
    • 10/29/2018 - Perspective on Recent Market V
    • 10/08/2018 - Quarter 3, 2018 Market Review
    • 08/08/2018 - E+R=O, your reactions determin
    • 07/06/2018 - Quarter 2, 2018 Market Review
    • 05/31/2018 - Bitcoin vs Gold
    • 04/09/2018 - Quarter 1, 2018 Market Review
    • 03/26/2018 - Another Tariff, Another Downtu
    • 02/07/2018 - Professor Jeremy Siegel @ Xavi
    • 01/05/2018 - Quarter 4, 2017 Market Review
    • 10/05/2017 - Quarter 3, 2017 Market Review
    • 07/14/2017 - What is Value Style investing,
    • 07/10/2017 - Quarter 2, 2017 Market Review
    • 05/24/2017 - Is Anyone Managing Your 401(k)
    • 04/05/2017 - Quarter 1, 2017 Market Review
    • 03/01/2017 - Are New Stock Market Highs a C
    • 01/05/2017 - Quarter 4, 2016 Market Review
  • Retirement Planning
  • Security & Privacy
  • Taxes
  • Financial Planning
 

INVESTMENT
MANAGEMENT

Your investment philosophy should be grounded in academic research and financial science. Our team will build you an investment portfolio that aims to give you the highest probability of achieving your goals with the least amount of risk.

Learn More
 

RETIREMENT AND
TAX PLANNING

Figuring out how to recreate your paycheck or developing a spending policy should not be an overwhelming exercise. Our team has the expertise to help with retirement portfolio, tax strategies, distribution planning, social security maximization strategies and more.

Learn More
 

HOLISTIC/COMPREHENSIVE
PLANNING

We’ll have discovery conversations, gather and organize your data, then craft comprehensive plans to achieve your life and financial goals. As our ongoing commitment, we consistently monitor and tweak your plan to ensure you’re on track and surprises are minimized.

Learn More

WE'VE BEEN LISTENING
FOR OVER 30 YEARS

Life brings many transitions. Find the right advisor to fit your needs on a fee-only basis, and take the first step in the journey. Total Wealth Planning's team of Certified Financial Planners® guides Cincinnati families and associates through transition.


Total Wealth Planning Associations
WE ARE PROUDLY ASSOCIATED WITH

CONTACT INFO


 

WHAT'S NEW AT TWP


       
CORPORATE EXECUTIVES

WEALTH-BUILDING FAMILIES

RETIREES

BUSINESS OWNERS
ECONOMIC OUTLOOK

BLOG & NEWS

VIDEO LIBRARY

   
4665 Cornell Rd. Suite 160, Cincinnati, OH 45241 4665 Cornell Rd. Suite 160, Cincinnati, OH 45241
513-984-6696 513-984-6696
info@twpteam.com info@twpteam.com
Estate Planning for Your Pets
Tuesday, May 19, 2020


SEE MORE >

Follow us on Google+
Blog & News
Follow us on Twitter
Find us on Facebook
DISCLOSURES | COPYRIGHT © 2020. TOTAL WEALTH PLANNING. ALL RIGHTS RESERVED.
GET STARTED
READY TO
GET STARTED?