Stocks Just Had the Worst Start In 50 Years, Now What?

With the market taking a turn for the worse in the first half of the year and the S&P tumbling more than 20%, where do we go from here? This market has been a tricky one. Markets come and go in cycles, the big kicker with this market is we have seen a decline in the bond market, generally thought of as a hedge for equity or stock exposure, like never before. With that being said, now investors are faced with a decision that defies what human nature tells us to do; buy.

When we go into a store, we often see things on the sale rack and immediately our interest in the item goes up, simply because it’s on sale. Strangely enough, our emotions with the market tend to be the opposite. The average investor tends to buy at market peaks and sell when the market is down. This obviously is what separates making vs losing money in the market.

Our goal shouldn’t be to time the market. As long-term investors, buying reputable companies stock’ is a strategy that defeats trying to time the market. However, we are now presented with a buying opportunity that will price in the winners of the next bull market, and the time is now to take advantage of such discount in the market. Whether or not we are at the bottom, which we believe we are near, is really not as relevant as relevant as the ability to buy undervalued companies who are still showing strong profits in a contracting first half of the year market.

A big emphasis we want to make is this one, when in doubt, zoom out. Over the short term, a market decline feels like a big loss. Over the long term, however, its just a bump in the road, a fruitful road at that.

-Colin Feller