For me, the most challenging part of being a long-term investor are the shorter term peaks and valleys of the market. It has been said that in the long run, the market is a weighing machine, and awards companies for solid results. In the shorter term, however, it is a voting machine, subject to whims of the investing community. Yesterday’s news was that Target had higher expenses which hurt the company’s profits. It still made money. Lots of money. The market, however, took the message (along with the other concerning items out there) and decided that Target should go on sale. 25% off. In one day.
Needless to say, swings like this hurt investor confidence. When stocks go on sale, it is more difficult to want to buy them and to continue to own them. Human tendency is to take what has been happening and project it out as if it is the new normal. It normally isn’t.
We understand that reviewing your portfolio is never pleasant when you see double digit losses versus the value just one year ago. Remember, however, that our focus is on keeping funds in the market that you will need in the next five and ten and fifteen years. And that we strive to own less volatile assets for those upcoming expenses where it does not make sense to subject these dollars to as much in the way of risk. This is the job that you have hired us to do. To bring discipline and perspective during times like this. Owning stocks is hard and it may very well continue to be hard for a while yet. We will continue to look for rebalancing and tax-loss sale opportunities, and review our holdings for continued appropriateness or potential substitution.
Please reach out if you have questions, or if you have liquidity needs we may not know about, or if you just want to chat. That is what we are here for. We have been here before, and, we will be here again in the future. It is the not so fun part about being long-term investors.
This material is not to be construed as investment advice or a recommendation to buy or sell any security. Investing involves risks including possible loss of principal. Past performance is not a guarantee of future results and there is no guarantee an investment will be successful.