Given the stock market’s wonderful start to the year – as in the worst start to the year ever (as measured by the S&P 500) – I imagine there is some uneasiness out there.  While I am in the process of working on a more detailed discussion of the subject, I thought it beneficial to share an email Melana recently sent to a client who had some concerns about the market.  It does a great job of explaining how we think about this recent downturn and why watching the headlines too closely can be hazardous to your wealth.

I hope you find it as fruitful as I did.

Note: to keep the compliance hounds at bay, I’ve added some commentary at the end of the piece in [brackets].  Oh, the joys of an overly zealous regulatory environment …


Hi Beautiful Lady, [not her real name]

Talk about an e-mail I’d never expect from you!!  🙂

First, stop reading/watching CNN!  The headlines are full of drama.  Truth is, markets are down, and it is possible they drop further before stabilizing and recovering.  But to us, this is normal – it indicates a properly functioning market.  Markets have fluctuated for as long as they have existed and, if you look at their history over the long term, they have still grown in a meaningful way.

Markets like these present a very nice buying opportunity for you and ‘Handsome Man’ because, as we like to say, everything is on sale!  Keep saving aggressively into your 401(k)’s and your IRA with us (‘Handsome Man’ just stopped in today to make your 2015 contribution!).  Ed has a saying I love – “we make money for clients when markets go down.”  It is so true!  This is when staying invested, continuing to save into the market, and being disciplined with your asset allocation all pay off in the long run!

So, try not to focus too much on the headlines.  While they can be interesting to follow, it can result in bad decision making if you get too wrapped up in it.  The basics still apply, even in tough markets – stay invested, keep saving, and stick to your properly diversified portfolios.  And lean on us for answers to questions like yours today.  That is what we are here for!  🙂

I hope this helps!


[Saying it is a “buying opportunity” isn’t a recommendation to run out and invest a bunch more money.  Rather, it is an acknowledgement to continue investing systematically as your dollars are buying more shares now that prices are down.  One of the worst mistakes investors make is to stop investing regularly when markets drop.  Remember: price matters.]

[“Everything is on sale” is a figure of speech – do not take it literally.  Yes, I agree – you’d think everyone would realize we do not literally mean “everything is on sale.”  Also, when I say “everyone would realize,” that is also a figure of speech – I do not literally mean “everyone.”  Obviously, the regulators are not a part of “everyone,” hence this disclaimer.  See what we have to go through here??]

[‘Handsome Man’ isn’t his real name.]

[Any resemblance to real persons, living or dead is purely coincidental.]