Good evening, thank you, thank you, please, hold your applause. We here at Fleishman Wealth Management are delighted to report that 2016 was another excellent year for our clients, particularly because we continued with our decades-long philosophy of doing nothing and throwing up our arms and saying ‘lol, idk’ to explain every move in the stock market.
You may remember January, when the S&P 500 lost 10.5% in the first 28 trading days of the year. It was the worst start to a year for US stocks ever. Ever! And many of our competitors saw that as a sign that things were bad and it was time to pull out of the markets. Our friends at RBS said to sell everything. Time to liquidate your 401(k), folks!
And there were lots of good reasons to believe them: falling oil, volatility in China, shrinking world trade, rising debt, weak corporate loans, and deflation. Heck, this was before Brexit or President Trump entered the scene.
But at Fleishman Wealth Management, we did not panic. We did not sell a single share of stock. We actually bought more!
Here is what happened next.
Over at The Reformed Broker, Josh Brown explains:
It’s important to note that this happened in the absence of quantitative easing by the Fed and with the pace of US stock buybacks down substantially from the prior year. This also happened in the context of an “earnings recession” and with all of the uncertainty of the most rancorous election of our lifetime, slowing Chinese economic data, Brexit, a spike in European nationalism and all of the other horrible sh*t you could toss into the cauldron.
The stock market will not go up every year. And we will have future downturns and recessions and plenty of other bad things that we can’t see coming. But who’s to say when that will happen and how that will affect the market. A lot of bad stuff happened this year, frikkin’ Donald Trump is President, and the market is up 20% from its January lows. Um, ok.
We don’t try to explain the unexplainable at Fleishman Wealth Management. Many of you are frustrated by this. We just diligently save and invest your money, in a broad range of stocks, at every downturn, and at every upturn. And, I would say we’ve done quite well. You wanted to pull out in 2000. You wanted to pull out in 2008. And believe me, we understand that it’s not fun to watch your accounts get cut in half. This game is not easy. But ultimately, you’ve stuck with us. And I don’t want to brag, but you’re all better for it.
Patience in this game is a good thing. Warren Buffett once said, the stock market is a device for transferring money from the impatient to the patient. We don’t accept impatient clients in our firm. We don’t accept day-traders or speculators or people who yell loudly. We’re quiet and boring, and we like it that way.
Here’s the thing, folks. You have to invest. You have to do something with your cash to beat the rate of inflation over time. Jack Bogle once said that the only way to guarantee you will have nothing at retirement is to invest nothing along the way.
And yes, investing is hard. Loss aversion is a powerful force. There will always be risks in the market. But the alternative for stepping out into the unknown is the known of never building your wealth.
You have to take your chances. Thanks for taking them with us.