Last quarter saw the bear market continue. Global stocks went down almost 7%¹ and US bonds lost almost 5%.² We’ve seen several positive indicators, but war, inflation and a potential recession have battered the markets. Recently a client asked me, given the bear market and bad news, “How can you be so calm?” In the moment, I said something to the effect of, “It’s a combination of belief and experience.” Since that conversation, however, I’ve been thinking more about the question, particularly in light of the “Bear Market Toolkit” we released last quarter.
Greater comfort. Isn’t that what we all seek in this new era, where a rogue virus can shut down the entire world in a matter of months? Where our portfolios can be cut in half in a matter of weeks? And, where we have so many messages and so much noise coming at us in just a matter of minutes, we don’t know who to believe or trust. Particularly in times of chaos or when so much seems out of our control, it is natural to seek comfort. It’s what’s sold to us. But it can come at a high price.
“History does not repeat itself, but it often rhymes.” – Often Attributed to Mark Twain
Eleven years ago Monday, March 9th, 2009, marked the bottom of the bear market of the great financial crisis of 2007-09. I was struck by the irony that eleven years to the day we found ourselves in the midst of another global panic. But this time the fear feels different. Right now, we not only perceive a threat to our financial security, but also to our fundamental health and well-being.
