A Letter from Craig C. Rogers
You may be a little anxious after last week, and frankly you would hardly be alone judging from last week’s selloff. But thankfully, all of you are thoughtful, patient, and intelligent investors. I have always been thankful that I am lucky enough to work with clients that have those characteristics and with whom I share common values. I realize while you are all of the adjectives above, it can still cause some frustration and discomfort.
It really would be nice if we could guess correctly and be out of the market during downturns, corrections, or even bear markets and avoid them altogether. Some might even begin to think it’s possible, given the fact that there are many sensationalist market “analysts” who have been sounding the “doom trumpet” for a number of years. That really is the important take away though, “a number of years.” In other words, say it loud enough and long enough, and because of natural market cycles you’ll eventually be close to correct. The problem is, those same prognosticators have been wrong for a long time, and had you followed their advice to be out of the market then you would have been out of the market since 2009 and missed huge returns. It has been that long since the “doomsdayers” have predicted mass turmoil. Since 2009, we have had 2 occasions when the markets felt like they were beginning a repeat of 2008 & 2009: the summer of 2011 and the summer of 2015 (last summer). In both of those scenarios, the markets rebounded quickly despite many market participants being gripped by fear.
Maybe my strongest piece of advice would center around “realizing” the “unrealized” losses for those thinking of getting out of the market. Why participate in the negative market into correction territory, and then not be in the market for the gains that invariably come out of seemingly nowhere. Very seldom does it feel like market gains are high when we are in the midst of downturns. In fact, there is usually a prevailing feeling of fear and doom. However, markets work and are very resilient, and many times the markets rebound when pessimism is highest. One thing is generally true throughout my career, don’t follow the herd! That goes for the irrational exuberance of 1999 when many investors thought it was very easy to make a fortune by loading up on stock exposure and buying primarily large growth and technology companies. It was also true in March 2009 when the stock market saw its biggest selloff in history (at the bottom), only to start a great bull run that very month!
You probably aren’t considering selling stock. I really just wanted to reaffirm what you already know. There are reasons to be optimistic. Domestic earnings are pretty good and price/earnings ratios are reasonable given current conditions. Also, you could argue that much of the pain from international market drops has already been felt. Many times, markets can correct quickly, and the selloff becomes more severe than the negative news warrants. In these cases, markets can move forward even in the absence of “good news.” Diversification is still the foundation of prudent portfolios!
We will be reaching out to you soon and scheduling our progress meetings where we can talk about these things and how it relates to your portfolio. Until then, if you need to talk please give me a call, I welcome the conversation. I’ve enclosed two articles that you may find interesting, we’ve highlighted a few of the paragraphs we like best.
Thank you for your trust; we will be here anytime you need us!
Craig C. Rogers
Rogers Wealth Group
1330 Summit Avenue
Fort Worth, TX 76102