The S&P may have been down today, but for the first time in seemingly forever there was more green than red in our portfolios. We did extremely well from about March 23, 2020 until this Valentine’s Day when the bloom fell off the rose of green/tech/disruptive companies that we tend to favour. It’s been quite a trimming since then …
But, as Beth Kindig over at I/O Fund recently pointed out:
For us, the most important question is whether we are in a secular bear market. We believe in long term buy and hold—except in a secular bear market and a long economic recession. This is because the goal is to avoid holding positions at a loss during an extended period of time. Therefore, in any selloff, the question we ask ourselves is whether this is a quick correction or secular bear market. Unless you are a day trader, most investors are better off holding through these quick corrections than trying to time both an exit and an entry.
You can no doubt find lots of pundits pointing out stats and facts that indicate we are on the cusp of market annihilation but we tend to agree that this is but a dip and the bull market is about to continue for the rest of this year and more. Beth points out these indicators that point to uptrend return: “a high consumer savings rate, strong GDP, and dovish monetary policy from the Fed. Those are excellent signs for a strong economy.”
There are now some pretty good prices out there on good companies not just the speculators, in case you feel like it is time to invest despite all the red you might have seen in your portfolio lately. This seems like a good time for a reminder about Warren Buffett Investing 101:
Be fearful when others are greedy, and greedy when others are fearful.
