February 2019 Commentary: Don't Do ItSubmitted by MidWestOne Investment Services on February 6th, 2019
Since I last wrote, we experienced one of the worst winter cold snaps that I can remember. We all have some recency bias, Tiger Woods is better than Jack Nicklaus, Lebron James is better than Michael Jordan, etc., but this polar vortex thing was the worst cold spell that I can remember. Maybe we all think we are invincible when we are kids and I have forgotten some cold days, but our little dog wasn’t even interested in hanging out outside. Even had to carry him home one day when his paws got too cold and he couldn’t walk anymore!
Through the years you have heard me focus on the importance of having a plan. That importance has been emphasized over the last 13 months or so. After struggling from the gate in 2018 with a slightly negative first quarter, the S&P 500 built momentum through the normally difficult summer months and was ahead 10.56% through three quarters. Then October hit, and after treading water in November, December hit hard. If not for a Santa Claus rally, the fourth quarter (down 13.52%) and year (down 4.38%) could have been worse. But as I mentioned last time, the Fed has taken a gentler tone to interest rate hikes and the market has responded positively, moving more than 9% ahead so far in 2019.
Allan Walz shared this article with me a while back and coincidentally I received it from Oppenheimer directly today. That means I should probably share it! It presents a logical reminder on how to approach markets when our emotional side is presenting a slightly different take on the next course of action. As Warren Buffett is credited with saying, “Be fearful when others are greedy and greedy when others are fearful.” Having a solid financial plan in place allows for that to happen.
Thank you very much for reading along. Stay warm and dry out there!!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.