The December Rout
BLOOMBERG, DECEMBER 26, 2018, 10:23 AM
INVESTORS SCRAMBLE TO PULL CASH OUT OF MUTUAL FUNDS
Investors withdrew $56.2 billion from mutual funds during the week that ended Dec. 19, according to data from the Investment Company Institute. The mutual fund market hasn’t experienced a one-week outflow so large since October 2008.
REMEMBER THESE HEADLINES DURING THE “DECEMBER ROUT?”
We’re always preaching patience and long-term investing but we’re also well aware that scary headlines such as the ones above make it difficult to remain in the market when “experts” are warning that the world is coming to an end. So, I decided to track the daily headlines post-“Rout” to see how helpful the daily news might be for investors. I believe you’ll find the almost daily flip-flopping enlightening and it will persuade you to ignore the financial pornography and remain a patient long-term investor. Be sure to note the flip-flop between the red and green boxes, particularly the heavy ones.
Obviously I didn’t know where the market was going when I started this, but I haven’t been surprised that the media coverage followed the classic pattern below.
The moral is, next time you think you should make your investments decisions based on financial pornography and “breaking news,” reread the history below since the beginning of the “December Rout” and think twice before you bail out.
Investment success is based on time IN the market, NOT market timing!
FINALLY, AFTER READING THIS I THOUGHT YOU MIGHT ENJOY A BIT OF CREDIBLE OPTIMISM FROM WARREN BUFFETT
Buffett: Stocks are ‘virtually certain’ to rise in years ahead
‘Miraculous’ U.S. economy remains the engine, says Berkshire chief. He’s not worried.
Warren Buffett assured Berkshire Hathaway investors that they’re likely to continue seeing “substantial” investment gains, aided by what he describes as the long-running U.S. economic miracle.
“Our expectation is that investment gains will continue to be substantial—though totally random as to timing—and that these will supply significant funds for business purchases,” Buffett said in his annual letter to Berkshire
Naysayers may make money by pushing “gloomy” forecasts, he said, but “heaven help them if they act on the nonsense they peddle.”
https://www.marketwatch.com/story/buffett-stocks-are-virtually-certain-to-rise-in-years-ahead-2017-02-25
If you made it this far, I hope you found it useful and this history lesson provides some comfort as we struggle (once again) through volatile markets. Just remember, patience pays and we’re here for you if you’d like to chat further.
Sincerely,
Harold Evensky
Chairman
Evensky & Katz / Foldes Financial Wealth Management
Categories
Recent Insights
-
Burnout in the RIA Marketing Seat: Keeping Your Spark Amidst AI and Endless Hats
If you’ve ever worked in a marketing role at a Registered Investment Advisor (RIA), you know the role often comes with an invisible subtitle: “Marketer-slash-everything-else.” Expectations are high, resources are often lean, and success can feel ill-defined. Add the growing pressure around artificial intelligence (AI), and it’s no surprise that RIA marketing burnout is becoming…
-
Turning Wealth Into Wisdom: How Families Shape a Lasting Legacy
Money is more than a tool—it’s a teacher, a mirror, and a powerful force for change. From childhood lessons to family traditions, our financial beliefs and habits are shaped over time. But when families plan intentionally, wealth can do more than last—it can lead. By passing on not just assets but values, purpose, and insight,…
-
Redefining Retirement: How to Repurpose After a Successful Career
A recent report from the Financial Planning Association hit on something we see all the time: people can have their financial ducks in a row for retirement, but emotionally? They’re often miles behind. It makes sense. Leaving a long, successful career isn’t just about money; it shakes up your routine, your social life, and even…
-
The Growing Phenomenon of Grey Divorce: What Older Couples Should Know
-
Roxanne Alexander
-
H. Frances Reaves, Esq.
While divorce rates have generally declined in recent decades, one demographic has bucked this trend: couples over the age of 50. Dubbed “grey divorce,” this growing phenomenon presents unique challenges that younger divorcees typically don’t face. As empty nests, changing social norms, and desires for personal fulfillment drive more long-term marriages apart, those involved must…
-
-
SECURE 2.0 Roth Catch-Up Rule: What High Earners Need to Know Before 2026
Beginning January 1, 2026, a key provision of the SECURE Act 2.0 will take effect that reshapes how retirement plan catch-up contributions are handled. Known as the SECURE 2.0 Roth catch-up rule, this change will require anyone age 50 or older who earned more than $145,000 in wages from their employer in the previous year…
