2019 will go down as one of the best years on record for investors. Global stocks returned +26% and bond investors earned nearly +9%. Even a balanced portfolio would have likely returned in the high teens and if you were heavy in equities, one would expect over 20%+ returns. But it didn’t come easily. We came across an article with a perspective on what investors had to fight through to earn those returns. The author asks the reader to look back on the year and think about all the scary things that happened and to recognize that you stayed invested regardless. These things are easy to dismiss with the benefit of hindsight, but very hard to interpret as they occur.
Here’s what he asked readers to read and recite:
- The S&P 500 had no earnings growth over the prior year, but I invested anyway.
- The House brought formal impeachment charges against the President, but I invested anyway.
- Some of the smartest people in finance predicted recession, but I invested anyway.
- The Fed was forced to begin cutting overnight rates to support the economy, but I invested anyway.
- The last round of Silicon Valley “unicorns” melted down upon going public, but I invested anyway.
- Auto loan delinquencies rose, causing the media to dub them “the new subprime”, but I invested anyway.
- The national debt hit a record $23 trillion, but I invested anyway.
- US government spending hit $4.75 trillion while its revenue was just $3.65 trillion – leading to a $1.1 trillion annual deficit, but I invested anyway.
- A few of the frontrunners for the Democratic nomination were open proponents of socialism, but I invested anyway.
- The trade war caused recession-like conditions for entire American industrial sectors, but I invested anyway.
- Negative-yielding bonds proliferated around the world and the 10-year Treasury rate plunged, but I invested anyway.
- China’s economy slowed to its worst growth rate in 30 years, but I invested anyway.
- The President went to war with his own Federal Reserve chairman, but I invested anyway.
- The yield curve inverted, but I invested anyway.
Staying invested requires discipline in the face of constant threats to your portfolio value. Over the long-term, it works. The full article was written by advisor and CNBC contributor, Josh Brown, and is available by clicking here.