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Bulls and Bears, Trade and the Fed: Advice for the Head Scratchers

As an investment advisor and partner to our clients, it is our responsibility to put stock market and investment news in proper perspective. While the media is reporting daily on market fluctuations and speculating on what might happen in the short term, it is our duty to help guide you through the ‘noise’ and stay focused on what truly matters when it comes to your financial plan and your portfolio.

It is not completely outlandish to feel a sense of uneasiness about investing in our current market climate. Unprecedented growth and increased volatility leave us wondering when the next market “crash” will occur. Political and economic influences are on the forefront, as investors scratch their heads in concern with everything from trade wars and maintaining economic allies, to inflation.

Vanguard Founder, Jon Bogle said, “The Stock Market is a giant distraction to the business of investing.” He goes on to say, "The expectations market is about speculation. The real market is about investing. The only logical conclusion: the stock market is a giant distraction that causes investors to focus on transitory and volatile investment expectations rather than on what is really important – the gradual accumulation of the returns earned by corporate business."

Put simply, Bogle is saying that we know the market will fluctuate. We know interest rates will fluctuate. We know that news stories and the media try to paint a picture to get us to read their articles. But, implementing an evidence-based investing strategy that focuses on the long-term will help mitigate some of these short-term concerns. Take a look at the following chart:

Capital Markets Reward Long Term InvestorsWhile we could indulge in incredible analyses of the latest economic news – China, trade, The Fed, President Trump’s decisions and so on – we won't. We don't want to distract you from the real task at hand.

As an investor, your job is to remember that these are the very kinds of intrinsic events that our evidence-based strategy is meant to help you overlook, so you can achieve the kind of investment success that Bogle and countless others have described.

If the gloomy headlines worry you to the point that you are wondering whether you need to "do something," we hope that the "something" will be to call us right away, so we can discuss what actions – or inactions – are in your best interest. Making too many changes in a portfolio can many times have an adverse effect. Academic studies have found that market timing costs about 1.56% in foregone returns per year!

Because we owe our clients a fiduciary duty to always serve their highest financial interests, it is both our desire and our legal obligation to advise you accordingly. It is a responsibility that we take very seriously. Remember the following:

Market drops are an expected, unavoidable part of investing.
Our advice is simple and straightforward: Stay calm and stay the course.
Remember why you are investing. If you're saving for a long-term goal, such as a retirement, your allocation already factors in a short-term market drop.

If you're merely curious about the current market climate, we'd be happy to talk with you and answer any questions you may have. Even though we encourage you to not focus too heavily on the market's daily activities, as financial professionals, we are aware of the details in the news and are always discussing the implications of such current events on our client’s portfolios.

"The stock market is a device for transferring money from the impatient to the patient."

- Warren Buffet, The Oracle of Omaha

Our job is to remind our clients to remember this is what you and we have prepared for together. Come what may, we're here to help you stay on your way. Contact us at This email address is being protected from spambots. You need JavaScript enabled to view it..


i. Bogle, John, 2007, "The Little Book of Common Sense Investing."
ii. https://research.stlouisfed.org/publications/economic-synopses/2014/07/18/the-cost-of-chasing-returns/

Tags: financial planning, retirement planning, investment planning, investment, comprehensive financial planning, women's wealth, planning for retirement, financial security, millionaire within, book

Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital.
Information provided in this blog is for educational purposes only and is not intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with own financial advisors, accountants, or attorneys regarding your individual circumstances as needed. No advice may be rendered by Arcadia unless a client service agreement is in place. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

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