Broker Check

Don’t Panic! We’re Here to Help You Plan for the Long-Term

| March 19, 2021
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In most of 2020 and the beginning of 2021, the volatility of the markets has tested the resolve of most investors and institutions. The coronavirus pandemic, social unrest and the change in administrations contributed as dramatic influencers. But short-term market movements, whether up or down, should not control your investment strategy. Having a sound financial plan and investment strategy in place can establish clarity and aid in a healthy financial life for both you and those whom you care about most.

While the adage, “buy low, sell high,” oftentimes applies to investment success, be sure to act judiciously. Timing the market can be challenging. Even the best investors, like Warren Buffett, do not always beat the market. With rare exception of devastating plunges, stock market dips and corrections occasionally occur. Thankfully, they’re followed by market recoveries. Sudden, severe and unexpected crashes of the 20th and 21st centuries - The Great Depression (1929), Black Monday (1987), and most recently, the COVID-19 Pandemic (2020) – struck us with extreme lows, but eventually the markets rebounded remarkably. Keep in mind, using history as our resource should be considered a reliable tool as we greet and make choices for the future.

So, what is the most valuable lesson investors learned in 2020? Securing long-term planning and investment strategies along with “staying the course” may be your best course of action. When stocks decline, long-term investors know better than to try to time the market. Collaborating with your advisor, understanding your financial goals and circumstances, along with ignoring market disruptions, may help produce a comprehensive strategy for long-term planning. When a carefully considered and executed plan is in place, likely you’ll experience little to no emotion-driven panic.

The graph below depicts a hypothetical example of an investor who had taken his/her money out of the market, subsequently missing out on some of the best performing days in history.


Using the example in the illustration, you’ll see that an initial $100,000 that stayed invested - highly volatile markets included - was rewarded with greater returns than those attempting to time the market. If you had missed the best five days in the S&P 500 over the last 20 years, your returns would have been considerably diminished, by more than $150,000. Furthermore, if you had continued to try your hand as a market-timer, jumping in out of the market, it is possible you could have missed the top performing 25 days in the S&P 500 over the last 20 years. Consequently, your return would have been less than your initial investment. Eye-opening, for sure.

Fear and emotions should not direct investment strategies. Maintaining a long-term perspective may help you avoid turning over your positions too frequently when markets rise and fall. Market timing is fallible as attempting to predict future movements is a game of chance, no matter the analysis, and even the most adept investors stumble. Adopting an investing style of discipline, patience and value is best practice for best strategy.

At Private Capital Group, we understand the emotional aspect of sustaining a decline in your overall portfolio performance. We firmly believe that staying invested long-term, avoiding the emotional roller coaster, may be the best investment and planning approach. With our thorough strategy of long-term perspective paired with a continually monitored financial and retirement planning process, irrespective of investor type, we strive to give you financial peace of mind. We have carefully designed each investment strategy to withstand market volatility and protect your assets and portfolio, while meeting your financial goals. Maintaining a tailored, diversified portfolio with a combination of stocks and bonds across various industries and asset classes, may help protect against uncertainty.

Private Capital Group would like to thank you for your continued trust in our team. We are always and strive to always remain committed and devoted to helping you achieve and enjoy financial wellness.

Wishing you safety and health, and we look forward to speaking you soon.

Enjoy your weekend.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Private Capital Group, LLC (“PCG”), or any non-investment related content, made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Information contained in this communication is based on data gathered from what we believe are reliable sources. It is not guaranteed by PCG as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. Further, you should not assume that any discussion or information contained in this communication serves as the receipt of, or as a substitute for, personalized investment advice from PCG. To the extent discussed herein, investment indices are unmanaged and cannot be purchased directly. Historical performance results for investment indexes and/or categories are included for informational purposes only and generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  PCG is neither a law firm nor a certified public accounting firm and no portion of the communication should be construed as legal or accounting advice.  A copy of the PCG’s current written disclosure Brochure discussing our advisory services and fees is available upon request.
Please Note:  If you are a PCG client, please remember to contact PCG, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.  PCG shall continue to rely on the accuracy of information that you have provided.
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