I compiled the following list of great questions I have been asked by medical residents and newly practicing physicians over the last few weeks.
- How much money did my portfolio lose?
- Should I sell everything and wait in cash?
- I have cash that I have built up in my corporate bank account; is now a good time to put a big chunk in the
markets? - Can you call me when we hit the bottom?
- Can I buy just three or five of your favourite stocks that are at a discount?
Each of these questions underlines natural investor behaviours which oscillate between fear and greed – two emotions that drive markets and are evident in times of volatility like those we are now living through.
So rampant are fear and greed in the markets, that CNN Money has created a Fear and Greed index (https://money.cnn.com/data/fear-and-greed/).
This index reached an Extreme Fear reading of 3 on March 10th, 2020.
Our answer to all of the questions above is the same. As a long-term investor, it is best to focus on long-term portfolio results. Most of our portfolios have held up well in this environment. However, with broad equity indices and representative ETFs down significantly this year, it is normal to be fearful when the media purposefully exploits these fears. Further compounding these concerns with COVID-19 in particular, is the fear that health care workers are working on the front-lines.
So what is the correct answer to these questions? If you have a longer time-horizon, investing when things are cheaper as they are now, presents a great advantage to your portfolio and your retirement success in the future. When you are accumulating assets, depressed markets give you the opportunity to buy investments on sale. As Warren Buffett is often quoted as saying, “be fearful when others are greedy and greedy when others are fearful”.
While this is true, timing the markets and trying to time the very bottom of a correction to buy investments at their absolute lowest price is exceptionally difficult (read: impossible) to do consistently. The same is true of timing the top of a market.
The key to investment success is to have an investment strategy and to stick to it. Committing funds to be invested on a consistent basis, diversifying portfolios and buying great companies are all elements of a sound investment strategy.
We work with each resident and newly practicing physician to develop a personalized 5 Year Wealth Plan to help them to balance their goals and their cash flow – and reach their wealth goals. We work well with other professionals focussed on medical professionals.
If you are not yet a client of Tall Oak Private Wealth, we welcome you to click here to set-up an appointment to request your personal 5 Year Wealth Plan at no cost or obligation.
For those of you who already are clients, as always, we thank you for the trust you have placed in us to steward your portfolios. We continue to work hard on your behalf to ensure that we are managing your assets through these challenging times.
We welcome you to reach out to us to discuss your personal wealth plans as we remain just a phone call away.
The views expressed in this commentary are those of Tall Oak Capital Advisors as at the date of publication and are subject to change without notice. This commentary is presented only as a general source of information and is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax or legal advice. Statistics, factual data and other information are from sources Tall Oak believes to be reliable but their accuracy cannot be guaranteed. This commentary is intended for distribution only in those jurisdictions where Tall Oak Capital Advisors are registered. Securities-related products and services are offered through Raymond James Correspondent Services Ltd., member Canadian Investor Protection Fund. Insurance products and services are offered through Gryphin Advantage Inc., which is not a member-Canadian Investor Protection Fund. This commentary may provide links to other Internet sites for the convenience of users. Tall Oak Capital Advisors is not responsible for the availability or content of these external sites, nor does Tall Oak Capital Advisors endorse, warrant or guarantee the products, services or information described or offered at these other Internet sites. Users cannot assume that the external sites will abide by the same Privacy Policy which Tall Oak Capital Advisors adheres to.
