As the incomparable Jerry Garcia of the Grateful Dead once sang, “What a long, strange trip it’s been”. Over the last four months, I think those lyrics hit the nail right on the head.

By now you are all aware that from February 19, 2020 the S&P Stock Index recorded an all-time new high at 3,386.15. Who would have predicted how much the world would change during the following 16 weeks? To wit:

The market went from an all-time high to a bear market in just 16 days. I’ll use a word we have heard all too often now to describe—unprecedented. On March 23rd, 33 days after its peak, the S&P closed down 34% at 2237.40. The 34% decline from the previous all-time high in just 33 days is again…wait for it—unprecedented. However, following that decline we experienced the best 50 days in the American equity market. Ever. 1

If you are like me, that kind of movement brings with it a fair amount of motion sickness. In the depths of that decline, it takes a good amount of discipline and fortitude to stay the course. Fidelity Investments, for example, reported that 1/3 of all investors over age 65 sold out of equities from February thru May of this year. Further, 18% of all investors sold their full equity holdings. In fact, we currently have nearly $5 trillion dollars in cash in the US—which is double the amount recorded only five years ago. 2

During this time of the year, there are thousands of prognosticators who are trying to get your attention with their Midyear Outlooks. They give their best guess at how the rest of the year will play out. Since none of the prognosticators were close to predicting the last four months, how on earth would they have a clue about the next six?

Well respected Harvard Economist John Kenneth Galbraith once said, “We have two types of forecasters; those who don’t know and those who don’t know they don’t know.”

The short term (rest of this year) to intermediate term (first last of 2021) economy and market performance is utterly unknowable. Yet, I would put forth that none of you are investing for the next 1 to 4 quarters. On the contrary, you and I are long-term, goal focused, strategy-driven investors. In that way, if your lifetime cherished goals have not changed since January, then neither should your portfolio.

Many of you know that I am a huge fan of mountain climbing. One of my favorites is Ed Viesturs. He was on the IMAX film crew during the Mt. Everest debacle in 1996, that was retold in the book Into Thin Air, by Jon Krakauer.

In 2005, Ed was finishing his quest to summit all 14 of the 8,000-meter mountains on the planet. He had saved Annapurna in Nepal for his final 8,000-meter summit. Annapurna is known for have a 50% death rate for those who attempt to reach it’s peak.

During this time, a reporter asked if it was irresponsible for the husband and father of three to risk climbing the mountain. His response was that the 50% death rate was the average. But most, if not all, of the climbers had much less experience than him. See, he had already summited 8,000-meter peaks twenty other times prior to his attempt on Annapurna and felt that experience would go a long way toward keeping him alive. Of course, on May 12th, 2005, he became the first and only American to summit all 14 8,000-meter peaks in the world.

In the past 20 years, we have gone through the Dot.com Bubble, the Financial Crisis, and the Global Pandemic (which isn’t over). These temporary declines that test are emotions are examples of our 8,000-meter peaks. Life experience has taught us that each significant decline was followed by an eventual more significant advance. Optimism, to me, is the only long-term realism. There are plenty of obstacles before us, but there are also solutions just waiting to be found. Continue to keep the faith. This too shall pass.

Edit Text Editor 1 “A Teachable Moment” — Nick Murray Interactive, July 2020 2“33% of Investors Over 65 Sold All Their Stocks This Year” – Financial Advisor Magazine, June 18, 2020 The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the performance of larger companies in the U.S. Please note an investor cannot invest directly in an index. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding any funds or stocks in particular, nor should it be construed as a recommendation to purchase or sell a security. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 3159348/DOFU 7-2020