Congratulations! Pat yourself on the back!
You survived October’s stock market turbulence.
Remind yourself of a few important points:
A stock market decline in the 5% to 10% range, like we saw in October, is quite common. Consider the following statistics, provided by Dimensional Fund Advisors, for the U.S. stock market since 1979:
The average short-term decline within a given calendar year was -14%.
About half of the years saw short-term declines of more than 10%.
About one-third of the years saw short-term declines of more than 15%.
Five of the 39 years had short-term declines of more than 25%.
Calendar returns were positive in 33 of the 39 years measured.
If you measure your portfolio value from its peak, you will always be disappointed.
Taking your portfolio value and mentally shaving 10% to 20% off its value to represent a periodic downturn can be a healthy mental exercise to help you maintain perspective.
Losses are more painful than gains are pleasurable, but just like there are more sunny days than rainy days, there are more up days than down days in the stock market. We just have to weather a down day like a rainy day. It is not the end of the world.
Remember that losses are just on paper and don’t become real unless you actually sell during a downturn. We manage your portfolio to limit stock market sales during a downturn and allow time for a rebound and recovery.
We don’t normally brag about rankings from financial publications, but mutual fund research publication Morningstar recently announced the Morningstar Best 529 College Savings Plans for 2018. The survey covered 62 state plans covering more than 95% of college 529 plan assets. Two plans that we commonly recommend were highly ranked:
Gold: Utah, one of four Gold rankings (we often use Utah for non-Ohio residents)
Silver: Ohio, one of nine Silver rankings
As we approach the Thanksgiving season, we are grateful for your confidence and trust, and we wish you and your loved ones a very Happy Thanksgiving!!!
As always, please contact us with any questions, news, or comments.