Season of Change — Adapting to Market Conditions

Jonathan Satovsky
CFP®, ChFC®, CIMA®, CPWA®

Jonathan Satovsky reflects on the recent market volatility, the dangers of attempting to time the market, and the importance of not letting short-term market movements affect your long-term view on investing.


 

Good morning, good afternoon, good evening — depending on what part of the world you’re in.

This is Jonathan Satovsky of Satovsky Asset Management.

On this episode of Seeking Wisdom, Wealth and Wellness, we’re at the end of the third quarter of 2021, and we’ve had a down month. People probably forget what that’s like. The financial markets do go down. They went down in the month of September the most. The headline is: The Biggest Drop Since March 2020.

Well, there’s a lot of reasons that we can attribute that drop in the headlines.

It could be China property woes, worries about heated inflation, worries from Elizabeth Warren saying “let’s get rid of Jay Powell,” concerns about Fed tapering, concerns about earnings, concerns about PE ratios, concerns about the weather, concerns about COVID, blah blah blah.

Okay. I’m done with the concerns. So we get calls every time the market drops. People say or anticipating the market drops saying “I’m worried about losing money. We should get out and get back in.”

So, I know this is hard to understand. And of course, people need psychological safety and planning. The intersection between planning and investing is to have enough liquidity to be able to provide for psychological safety to be indifferent to short-term price movements, and if you have angst, raise that level of psychological safety. That being said, timing the market never consistently works for the simple and compelling, and not all obvious, reason that you have to be right twice. You have to get out right, which you won’t, and you have to get back in right, which you won’t.

Because you’ll still be ego tripping on your prescient bear market call telling people how brilliant are where you got out on the top, and you’ll be waiting too long to pull the trigger to get back in after prices drop. So remember, far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.

So, that’s the lesson on this episode. And remember, seasons change. That being said, recognize that in the season of change, you adapt and you evolve and you keep moving forward.

And human adaptation, the most priceless, invaluable way to capture human ingenuity, and the most valuable asset on earth, is owning equities in the continued growth of that ingenuity. Ponder that on this lengthened episode of Seeking Wisdom, Wealth and Wellness.

Have a great day.

 

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Video Recorded October 1st, 2021
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Disclosures

This blog post is not intended to be, nor should it be construed or used as, an offer to sell, or a solicitation or offer to buy any securities or interests in any strategy offered by Satovsky Asset Management, LLC (“SAM”). SAM is a registered investment advisor with the Securities and Exchange Commission – for more information see www.adviserinfo.sec.gov. Please remember that different types of investments involve varying degrees of risk, and that past performance is not indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the strategies recommended or undertaken by SAM) will be profitable. Market index information shown herein is included to show relative market performance for the periods indicated and not as standards of comparison. The market volatility, liquidity and other characteristics of SAM’s portfolio composition are materially different from the securities listed on public market indices. Market index information was compiled from sources that SAM believes to be reliable. No representation of guarantee is made hereby with respect of the accuracy or completeness or such data. Opinions are as of date of video and are subject to change. A copy of SAM’s current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request. SAM undertakes no duty to update information presented herein.

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