The Next 20% Move

The Next 20% Move

As if the news cycle wasn’t already stuck in short-term repeat, our lives have entered into a morose version of Groundhog Day and we have no idea when it will end. On Twitter, somebody posted it’s March 76th because that’s what it feels like. Spring is here and instead of barbeques with neighbors, we’re locked in our houses.

When each day seems like the last, it’s easy to get stuck in our own short-term repeat. The markets continue to move up, down and around with little sensibility. Historically remarkable unemployment announcements = the market goes up 1,000 points. Unlimited liquidity announced to ensure the proper functioning of our economy (whatever is left of it) = the market falls 2,000 points. Maybe it isn’t Groundhog Day but the Twilight Zone.

The short-term loop is a tough place to reside. It’s even worse when we are getting spun around like we’re on a Tilt-A-Whirl. Pundit after pundit goes on the news saying, “Here is what’s going to happen next.”

We know how this ends…they have no earthly idea.

They are just throwing things at the wall hoping they are right so they can ride their prediction into the sunset. Remember – there is no accountability nor consequences when they are wrong, so there is no career risk for their prediction, only upside.

I say all of this because I’ve gotten a number of questions at this point asking for my perspective on where the bottom is because they are curious when the waters will be safe to re-enter. Almost as if there will be an announcement of some sort to let us know. Or if I have some kind of magic 8-ball. Or if I have access to someone who knows. I’ll save you the suspense. I do not.

Neither does anybody else.

At this point, it’s my opinion that we haven’t seen the worst of this. But again, and I reiterate, I do not know. The market is marching north at the moment, but it could be quicksand. The reason I advocate for and personally follow a specific investment strategy is so that I do not HAVE TO know. I simply follow the strategy.

Outside of tax-loss harvesting, rebalancing, and other normal portfolio activity, I don’t make changes to portfolios based on my gut feelings or based on some pundit’s gut feelings. That’s a fool’s errand. I know better. It’s why you can google knowledge, but you can’t google wisdom. Wisdom is knowing we can’t know, no matter how much we want to know.

If you find yourself still sticking it out (congratulations) or you have money on the sidelines and are still trying to time the bottom perfectly, perhaps the following quote may provide exactly what you need to hear to provide a little boost of confidence. It’s a quote that I routinely come back to, but I can’t find the exact verbiage, so I’m going from memory. It’s from Nick Murray.

“I don’t know which direction the next 20% move will be, but I feel certain I know where the next 100% move will be.”

Long-Term Focus > Short-Term Distractions.

People get awfully caught up in the short-term gyrations. If you’ve been a member of the RFG family for a while, you’ll know I say the following all the time, but here it is again…

Statistically speaking, retirement is likely to be a ~30-year endeavor.

That being the case, let’s keep that multi-decade perspective instead of focusing on what’s happening in the market in any 8-hour, 8-week or 8-month span.

We will stick it out to the end and I’ll be here with you every step of the way.

Feel free to reach out if you have questions.

This post is not advice. Please see additional disclaimers.

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