Financial Strategies for the Holidays & 2018: Patience, Discipline, PerspectiveSubmitted by Reby Advisors on November 16th, 2017
By Bob Reby, CFP®
As we enter this wonderful time of year known as the Holiday Season, when we can invest additional time with our loved ones, it is a good time for reflection. As this Holiday Season begins, when financial plans and portfolios are looking healthy, it seems appropriate to express some portfolio humility as 2017 edges closer to a potentially historic year.
It’s been just over a decade since the S&P 500* reached an all-time market high on October 9, 2007. Fast forward to the fall of 2017, the S&P 500, including reinvested dividends, reached a level twice its 2007 peak.** That is really something considering the seventeen months following the 2007 market peak, the S&P 500 experienced the biggest decline since 1929-1932, bottoming out on March 9, 2009.
Some important lessons that can be learned from that time include the need for patience, maintaining a disciplined approach and not following the masses and selling when it seems that everyone around is doing just that.
Let’s return to current day, and the good economic environment that we are witnessing right now: rising corporate profits, continued low interest rates, low inflation, low unemployment, solid domestic and global growth, and more.
For a while now, we have been hearing about the potential for a significant correction. After all, like the saying goes, what goes up, must come down. When we do experience the next financial crisis, how will we behave, with patience and discipline? I hope so! Let’s go even a step farther and look for opportunities to take advantage of other people’s mistakes; when the emotions of fear and greed are running strong.
As we move toward the new year, I just wanted to plant a seed so that we can begin to prepare, so we can look back some day and say, we were expecting that storm and used the lessons learned from the past to navigate our way through it.
Please do not hesitate to reach out to Reby Advisors if you'd like to discuss your financial plan or investment strategy with an experienced, fiduciary advisor.
Enjoy your time with friends and family during the Holidays.
*S&P 500 The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to directly invest in an index. The return and principal value of the investments will fluctuate so that, when redeemed, they may be worth more or less than their original cost. Past performance is not a guarantee or a predictor of future results of either the indices or any particular investment.
**Nick Murray November 2017