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What If the Market Goes Down Again?

Mark J. Smith, CFP®, CPA/PFS, CIMA®
July 2, 2020

Since watching the markets hit what we hope is the low point for 2020 on March 23, we’re now experiencing a rebound that historical data indicated would happen next.


Despite the overall upward trend, we know and understand that the current market shifts can be nerve wracking for investors. What if the market trends down again? What should you do?


Here are some important points to consider if you’re concerned:

  • When stock prices are doing down, the enduring value of the underlying companies is going up. Think about market declines as sales, and the very nature of sales is that they are temporary. The lower prices go, the more value is to be had at those prices. You instinctively know this about virtually everything else in your economic life. Successful investors can apply that instinct to the stocks of America’s great companies.
  • Staying fully invested during temporary market declines is the only way to capture the entirety of the market’s permanent advance. We continue to stand by our longstanding advice: it is not possible to time the market. Selling out of falling markets and later buying back when the market is already advancing just doesn’t work for most investors. Stay invested to capture the long-term returns of equities. Those returns are your reward for staying calm. Historical data has proven this over and over again.
  • Don’t try to make a long-term investment strategy out of short- to intermediate-term disruptions. The market right now is a perfect example of this. When we work with you to create a plan to reach your life goals, we do so with the philosophy that to achieve your goals, you need to invest in a diversified portfolio over the long term. Nearly four decades of experience are behind our advice. Again, the long-term rewards come from sticking to your plan.
  • Cash and bonds may help rebalancing. Historically, we know that cash reserves and bonds will not match the return of the stock market for the long-term investor; however, we are maintaining allocations in both cash and bonds to reduce risk and to give us funds available to rebalance more into equities when stocks drop to take advantage of opportunities.

We’re Here to Help

As always, we’re here to provide advice and guidance if you are wondering if you should make changes to your portfolio based on current market conditions. Please reach out to your financial consultant with any questions. You can schedule a time here.

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