Positive outcome by sticking with your plan

Blog post #468

After Wednesday’s market close, November 4th, most US and developed International asset classes were up 4-5% for the month of November, after only 3 trading days. Emerging market were also positive, in the 3-4% range.

US markets are up an additional 2% on Thursday, November 5th midday, as I’m writing this.  If those gains hold, most US asset classes would be up 6-7% in only the first 4 trading days of November.  International markets have also been strong.

This is why we encourage you to remain invested in the market and adhere to your appropriate stock allocation plan. This is why we discourage attempts at market timing. You must be in the market to receive the benefits.

No one consistently knows in advance when the rewards will appear. And often, significant gains occur quickly and happen when investors don’t expect them. This is exactly what unexpectedly started in late March and April of this year, after the rapid declines of February and early March.

The market increases that have occurred this week alone represent a significant portion of the historical average annual gain for the broad US stock market.

Historically, the US stock market has averaged around a 10% annual (calendar) return since 1926 (defined by the S&P 500, which consists of varying US large company stocks). However, as I wrote in 2018, When Average is Not Average, the S&P 500 has never actually earned between 8-10% in any calendar year since 1926.

This post is not about the election or its outcome. We are not trying to analyze the reasons for the strong gains of this week. In fact, the gains of Monday and Tuesday were significant and occurred prior to any election results even being known.

We know that it can feel hard to remain invested during a time of political uncertainty, especially in the midst of a global pandemic.

The key takeaway is that while the volatility of investing can be difficult, having the patience to stay the course can be rewarding.

Talk to us.  We want to listen.  We want to assist you, your family members and friends.

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