Building Wealth in Down Markets
I've gotten three emails this week from you, our clients, saying, "Hey, how is the current SVB situation affecting us and is there anything to be concerned about?"
Believe it or not, today, I'm smiling. Why am I smiling when banks are failing and people are worried? It's for this reason.
(For our explanation of the current SVB situation, click here.)
Buy When People Are Fearful, Sell When They're Greedy
While volatility makes anyone nervous, we want you to know your plan accounts for rainy days. While individual plans vary, we tend to structure our clients' plans to be in a position to capitalize on volatility, rather than fear it.
When there is fear in the markets and people are hiding under their desks (and financial advisors don't want to reach out to their clients), we see some buying opportunities. This is where we have the best opportunities to build wealth.
For 18 or so months, I have been a Negative Nelly. I have been saying cash, short-term bonds, and fixed index annuities. We're not saying now's the right time to be diving into stocks, but here's what I can say definitively.
Down markets are where we build long-term wealth.
Down markets are where we get the opportunity to buy long-term, wealth-building companies at reasonable valuations. This is especially important because we have not seen reasonable valuations since March of 2020. That's why we've been conservatively positioned for the last 18-ish months. We've been rebalancing. We've been putting cash in short-term bonds. We haven't moved aggressively toward equities when prices are this high.
That time is coming, but for now, just take heart that I'm smiling. I'm not giddy, but I'm more optimistic now than I have been that things are going to get better from here. Broadly, things are probably going to get worse before they get better, but that's what we've been waiting for. So please take heart. There is a plan, and we want to position you as best we can to thrive in the midst of it.
You Are Always Welcome
If you have questions, call us any time. My time is your time. You're never an inconvenience. You're never an interruption. It is a joy to speak with you anytime.
For all of us here at Vizionary Wealth Management, thank you so much for the opportunity to continue to serve you and we can add more value during periods of volatility, like the one we seem to be entering. So let's look forward to better days and buying opportunities in the days ahead. We're always here with perspective for the decisions ahead.