On 24 November, the Dow Jones Industrial Average (DJIA) closed above 30,000 for the first time ever. In case you’ve forgotten, on March 23rd, the DJIA closed at 18,214. This is a rebound of about 65% in a period of about eight months’ time.

Let’s also not forget how loud the doomsayers had become in their war chant of “this is the end of the world as we know it.” How many times did we have to hear that it was going to get much worse before it got better?

Imagine going into a meeting on March 24th of this year and saying that before December arrives, the market would close above 30,000 for the first time and dividends would have remained stable across the market (with 216 companies actually increasing their dividends). And, oh by the way, life is still a world away from being “normal.” We would have been laughed out of the room by anybody but the most faithful of equity investors. And yet this is exactly what happened.

Taking this one step further, even just as little as a month ago on 2 November (a day prior to the “most important election in our country’s history” - as they say every election), the DJIA closed at 26,501. Many investors were wary about the market with election contestations on the mind, questions around the transfer of power, mail-in ballots, and many far worse election catastrophe predictions being thrown around. And yet again, we’ve come out of the other side with the Dow on pace for its best month in 30+ years.

This is investing.

Successful equity investing requires both patience and discipline. I am not sure where one ends and the other begins, but I know that holding an equity portfolio through the COVID market panic and political turmoil required some discipline. For investors who didn’t have a retirement income plan reminding them of why they own the portfolio that they do, it would have been close to impossible to endure the onslaught of catastrophic predictions.

I close most articles here with “Stay the course.” While it’s overly simplistic, it’s a decision that must be made if we are going to be successful equity investors. This unique year hasn’t made me question this philosophy so much as it has encouraged me all the more. As much as the market moves up and down, it’s remarkably resilient. And if we want our piece of the reward, we must never RE-act, only act. We must actively choose to stay the course, most of all when everything looks like it’s going south in a hurry. We must exercise our faith in the future that tomorrow will be brighter than today. Now is no different.

It’s my guess that COVID numbers will explode further following Thanksgiving gatherings across the country. If this happens, you may again be offered the option to stay the course or to capitulate. Though we don’t have an exact timetable, vaccines are on the way. If sentiment has any predictive power, there is pent-up demand from just about everyone across the country to “go out and do things” that may very well push the market higher still once this all settles down. But in the short term, it may fall again. This is investing.

Stay the course,
Ashby

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This post is not advice. Please see additional disclaimers.