I had an experience with a client recently that I wanted to share with all of you. My client, let’s call him Alex, sent me a message that he almost couldn’t believe the change in his account value for the month of November (he had just opened his statement). If you missed it, November 2020 saw the best monthly gains for “the market” since January 1987! Needless to say, he was pleasantly surprised.
Now let’s put this November into perspective. I don’t know about you, but what I heard a lot of from client’s family, friends, and especially all outlets of the media was that if (pick your candidate won the election) the market was going to collapse (incidentally it’s the same conversation I was having back in 2016 and 2012 and 2008 and so on but I digress). My answer, which many of you heard, is that there is not one person or government body that can make the best run 500 or so companies in the world not succeed. They simply will stop doing what they are being punished for and look for other ways to do business.
I like to think that “the market” is rewarding us long-term, goal-oriented investors for the turbulent ride we went through earlier in the year. It’s a perfect reminder that nobody can time the market. If you are to realize the premium returns the equity markets offer in the long run, you have to be willing to accept the uncertainty, otherwise known as volatility, in the short-term. There is no free lunch, the trade off is temporary (sometimes painful) declines on our way to permanent advances.
I hope all of you, like my friend Alex, are happy that you stuck to your long-term plan and got rewarded for it. I would like to wish all of you a wonderful holiday season and as always, please call me with any questions. It is a pleasure to serve as your advisor and behavioral coach. We at DCH Wealth are honored that you have put your trust in us.
Happy Holidays and Warm Regards,
David R Henderson
P.S. The ride to a record November wasn’t straight up. Out of the 20 trading days, only 12 were up. The other 8 were down. Now how could you have timed that!
This is being provided for informational purposes only, and should not be construed as a recommendation to buy or sell any specific securities. Past performance is no guarantee of future results, and all investing involves risk. Index returns shown are not reflective of actual performance nor reflect fees and expenses applicable to investing. One cannot invest directly in an index. DCH Wealth Management, nor any of its members are tax accountants or legal attorneys, and do not provide tax or legal advice. For tax or legal advice, you should consult your tax or legal professional. The views expressed are those of DCH Wealth Management and do not necessarily reflect the views of Mutual Advisors, LLC or any of its affiliates.