{"id":1196,"date":"2016-01-21T16:00:45","date_gmt":"2016-01-21T16:00:45","guid":{"rendered":"http:\/\/vhfinancialmanagement.com\/?p=1196"},"modified":"2016-01-21T16:00:45","modified_gmt":"2016-01-21T16:00:45","slug":"its-different-this-time-or-is-it","status":"publish","type":"post","link":"https:\/\/vhfinancialmanagement.com\/2016\/01\/21\/its-different-this-time-or-is-it","title":{"rendered":"It’s Different this Time…or is it?"},"content":{"rendered":"
Tweet<\/a><\/div>\n

Okay, the stock market is taking a beating. First things first, take a deep breath!\u00a0 The sky is not falling\u2026just meager snowflakes on this cold winter day here in Nashville.\u00a0 I turned on the financial networks this morning to find the usual suspects spewing fear.\u00a0 Run for the hills! Remember the talking heads are there to drive ratings. They are not there to give you personal financial advice!<\/p>\n

As with all of the recent market downturns (and I say recent because I can effectively speak for 1990-91, 2000-2002, and 2008-2009 as far as personally experiencing them with a mature level of understanding), they all seemed different.\u00a0 Yes, different can be scary, but it doesn\u2019t mean the end result will be less predictive.<\/p>\n

When the market slipped dramatically in late 2008, it felt different and drove many folks away from their investment strategy.\u00a0 This turned out to be a mistake.\u00a0 They feared that the market would collapse into oblivion, and they would lose their life savings.\u00a0 That didn\u2019t happen. Even though \u201808-\u201809 was financially painful, the market rallied back and roared forward with 6 plus years of solid positive growth.\u00a0 Unfortunately, those who sold at the bottom had a hard time recovering from their impulsive, fear-based decision to sell.<\/p>\n

So, if history will repeat itself, which I am counting on when it comes to the market, we should learn from the past.\u00a0 Matter of fact, we have had 14 recessions since 1926 (15 if you count 1926).\u00a0 Guess what: the market is 15 and 0\u2026undefeated!\u00a0 The market has won every time.\u00a0 After each recession, the market marched ahead past the losses and charged forward.\u00a0 I wouldn\u2019t be surprised if each recession \u201cfelt\u201d different during the downturn.\u00a0 But each recession ended the same: the market returned and moved forward.<\/p>\n

While the market is down, we are not technically in a recession\u2026at least not yet.\u00a0 And that recession may not occur, but, if it does, we should know what to do.\u00a0 The most important thing is to stay true to your investment strategy. For all my clients, we have a plan and a strategy. Part of the thought that goes into the strategy revolves around risk and knowing how much to take on.\u00a0 We are now facing that risk (downside movement).\u00a0 We didn\u2019t develop a strategy that is based on bailing out of the market when risk increases. We didn\u2019t develop a strategy that is based on an unrealistic unicorn and rainbow world that only produces positive stock market returns. We developed a real world strategy, and part of this strategy involves risk.<\/p>\n

Let\u2019s stay the course and learn from the past.\u00a0 If Vegas played against the odds of the market, there would be no more Vegas.\u00a0 So, again, I\u2019m playing the odds with the market.\u00a0 We may see some short term pain (I suppose we already have), but I still believe in the market and in our economic system.\u00a0\u00a0 So if you are looking for some tips to handle this downturn, here you go:<\/p>\n