On the Money: Investing During Market Turmoil

1:16 – Investing During Market Turmoil

The last month of the year (December 2018) was not pleasant – for both the stock and bond markets.  Really a tough year, the toughest year of my 35 years in the business – about the only asset class that positive return last year was cash.

Paul A. Ruedi

You have to fundamentally believe that the value of companies and their stock prices will increase over time.  I will never say what time that will be.  It can be a long period of time.  But eventually, I have complete faith that companies will continue to increase their profits over time and stock prices will eventually increase to reflect that.

David Ruedi, CFP®, RICP®

Surprise is the mother of panic, and when people are panicking, it’s too late.  So you have to get to them before that panic even happens.  I think that explains why we’ve only had one or two families call us during this recent market turmoil out of the many, many families we serve.   Maybe we were able to immunize people effectively.

Paul A. Ruedi

In the past I would get concerns from clients about missing out on the returns of equities.  I’m not getting as many of those lately – now people are worried about needing to be more conservative and how much further it can go down from here.  If our client base is doing that, people who are not constantly bombarded with messages not to do that are probably acting on those concerns.

David Ruedi, CFP®, RICP®

One of the hardest parts about investing – if you have a problem in your work environment, you don’t just let it continue on – you take action and make a change.  With investing, the worst thing you can do is sell when you have losses.  The best thing you can do is ride out the storm.

Ryan Repko

You should look at your account balance as being “squishy”.  So many people look at their account balance in their investment account and think their all-time high is their new floor.  They think of it almost like a bank account – this is all my money I shouldn’t lose any of it.  And of course the stock market goes up and down and when it goes down we’re surprised or are disappointed it is not where it used to be and we get frustrated.

Ryan Repko

Roughly 80% of the time you will be below your account’s all-time high balance.  Another statistic I calculated is how often you are 20% below your all-time high – that’s about 40%.

Paul A. Ruedi

34:29 – Ed Bond joins to discuss lessons from decades of listening to On the Money

43:23 – Caller Question:  If I was going to start investing – how could I begin to gain some return above a passbook savings account? 

Disclaimer: Past performance is not an indication of future results. You should not make any investment decisions without first consulting your own financial advisor and conducting your own research and due diligence.