Our commentary Headline in January was titled The Twilight Zone…we probably should have saved it for this quarter. As one client described the preceding weeks. “Good golly Miss Molly”!
Now we have to look forward, not backward. We want to approach portfolios pragmatically. What is the definition of Pragmatic? Dealing with things sensibly and realistically in a way that is based on practical rather than theoretical considerations.
We are not going to pretend to know when the Covid-19 crisis will be over or when the markets will bottom. The talking heads on Radio and Television don’t know, the CDC, WHO, and FDA don’t know when this will end, but we do know it will end.
So what can we do now? We plan to continue to be Pragmatic and logical about how we approach this unprecedented event.
We will continue to Rebalance portfolios. Rebalancing portfolios during market volatility has proven to be one of the smartest moves you can make. Historically rebalancing during a bear market has worked out very well for long term investors. (Chart below)
We will continue to Tax-Loss harvest where appropriate. No investor likes to lose money, but why not create a tax loss carry-forward for when you have gains at a later date.
One of the more pragmatic investors of our time was Jack Bogle, the founder of Vanguard. His quote below is very appropriate during this period of time.
“Your success in investing will depend in part on your character and guts and in part on your ability to realize, at the height of ebullience and the depth of despair alike, that this too, shall pass.”
Please focus on staying safe and healthy…do not hesitate to reach out with questions or concerns.
The Creekside Team