Market Update:

1. This sucks.  Nobody likes seeing this kind of market volatility.
2. The markets in the past thirteen months have returned over 35%.  It is easy to forget that.  You are just losing a small portion of what you just earned.
3. Dividend and interest income do not change when the markets go down.  The "money that the money is making" does not change.  I wrote an article about this last year.  Click here. 
4. Read the rest of this article.

Let’s go back to the basics. First, let's get some historical perspective to extinguish any lurking fears like, “The stock market is going to crash, I’m going to lose all my money, and end up living under an overpass with feral cats as my only companions.” The chart below reports factual returns of an investor who put 50% of their money in bonds and 50% of their money in stocks over the past 30 years. (Specifically the Barclays Aggregate Bond Index, and the S&P 500). This is not my opinion. The article continues at the bottom.

1990	1.5%
1991	24%
1992	9.8%
1993	13.2%
1994	0%
1995	28.58%
1996	13.74%
1997	22.47%
1998	18.15%
1999	10.87%
2000	.15%
2001	2%
2002	-11.8%
2003	20.9%
2004	10.3%
2005	4.88%
2006	11.33%
2007	4.3%
2008	-20.81%
2009	24.64%
2010	11.59%
2011	7.34%
2012	13%
2013	15.55%
2014	11.95%
2015	.34%
2016	11.07%
2017	15.67%
2018	-3.50%
2019	23.28%

Interesting Takeaways

1. Wow! You can make a lot of money investing in diversified portfolios.
2. The portfolio went down 3 times in 30 years.
3. The portfolio went up over 20% 5 out of 30 years.
4. The portfolio went up over 10% 19 out of 30 years.
5. Remember, when investing in retirement, you normally do not invest all of your money in the stock market. Bonds are important, too.
6. 2008 ranks as one of the worst recessions since the Great Depression. You would have lost 21% in 2008 and MADE 25% in 2009. Let me say this in italics to drive this home: During the worst recession in modern economic history, it took one year for your portfolio to recover. One. Year.
7. I could actually extend this chart back to 1935 and the results are quite similar.

Why does it work this way? Usually when stocks go down, bonds go up. Human beings are extremely emotional. When the stock market is retreating, it is common for investors to move their money into more conservative bonds (which is a mistake). There is a famous study by Dalbar, Inc. which shows the difference between investor returns vs. actual market returns. The result? Investors, on average, make 5% less than the stock market actually returns. (source) How is this possible? If the stock market returns 8% over ten years, why do actual human beings average 3%? I think you know the answer. This is why, I believe, it is so important to work with a fiduciary. Most humans need an objective, non-emotional professional helping them stay the course. No matter if you think the stock market is going to go up down. It just simply doesn’t matter. If you keep your head in the sand and withdraw around 5% of the portfolio for the rest of your life, you will be just fine. We have 200 years of economic history to prove this point. Bad stuff happens. Weird stuff happens. Change is inevitable. Wars, diseases, political upheavals happen. But, you, as a member of the Retirement Revolution are going to reject fear-based poor decisions, and reap the rewards you deserve. You can do this! Be Blessed, Dave