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  • Hey guys, like many of you, we're sheltering in place.

  • In fact, we're even separated from each other while Julia awaits the results of her COVID test.

  • Thankfully, I'm feeling much better, but I don't wanna get Philip or the baby sick.

  • But we know that people are looking for financial info more than ever, so we're gonna do this

  • lo-fi, and try to answer some of the pressing questions on top of people's minds, starting

  • with... the stock market crash.

  • I'm gonna let Philip handle this one and keep getting rest, but I will be back next week!

  • Remember way back in February 2020?

  • Ah, the good old days -- stock market at all time highs, everyone had a job, all the toilet

  • paper you could ever want.

  • Life was great.

  • The US stock market, measured by the DOW, has fallen over 35% in a month's time, wiping

  • away years of growth.

  • We witnessed the worst single-day decline since 1987, and the exchanges were temporarily

  • shut down three times in a week when it fell too far in a single day.

  • When the stock market fell by more than 20%, we officially entered a “bear market”.

  • Bear markets usually - but not always - precede a recession.

  • Like the stock market crashes preceding the Great Depression of 1929 or the Great Recession

  • of 2008.

  • Depending on the criteria, there have been between 10 and 20 bear markets in the last

  • century, and this month, we just entered another one.

  • This is a scary time we're living in right now, I'm the first to admit it.

  • I was worried when Julia came down with a bad cough and had to get tested for COVID-19.

  • I am hurting for my friends and family who are experiencing layoffs, slowdowns and closures.

  • This will have a lasting, harmful effect on our economy, and many people's lives.

  • But what we're seeing right now in the markets is not unprecedented.

  • In the words of investing pioneer Sir John TempletonThe four most expensive words

  • in the English Language are 'this time it's different.'“

  • We always think the current crisis is unique.

  • World Wars, nuclear meltdowns, Great Depressions -- even the global Spanish Flu Pandemic

  • that left 50 million dead.

  • The stock market's long-term average is accounting for every one of those terrible times.

  • Every time, things seem hopeless.

  • Every time, markets recover.

  • The bear wanders back into the woods, and markets thrive again.

  • It will happen with coronavirus, and the other bears in our future too.

  • Selling out of stock investments when a bear market rears its head turns a bad situation

  • into a worse situation in two big ways.

  • First, yourealize the loss”, turning a decline in share value into a real loss

  • in your bank account.

  • Think of it like seeing your home appraised for less, and immediately putting it up for sale.

  • You'd never do that!

  • Second, you're making nearly certain that you miss the recovery when it happens.

  • Between 1993 and 2013, the S&P 500 grew by 9.2% annually.

  • But if you take out just the 10 best trading days over that period, your annual average is cut

  • nearly in half.

  • If you missed the 60 best trading days, you'd average a -4.39% return!

  • By jumping out after a bear arrives, you seriously risk missing the wave of the recovery.

  • The aggressive among you may be wondering, “Well, is now the time to BUY stocks?”

  • Maybebut with a few caveats.

  • Financial experts discourage investing in the stock market with any money you may need

  • sooner than 10 years from now.

  • Keep money for short-term needs in safe havens like cash, bonds, or CD's.

  • But if you have a nice cash cushion AND you were already planning to invest that money

  • anyway -- yes!

  • Go ahead and continue to invest into the market.

  • By investing in good times and bad, you get to take advantage ofdollar-cost averaging”,

  • a strategy that, by investing on a regular basis, allows you to buy more shares on the

  • cheap and less shares as they get expensive.

  • Investing is for the long-term.

  • Retirement or college accounts are designed to be invested and grow for decades.

  • Don't let the turbulent news of today make you rethink a solid long-term strategy.

  • That big mean bear will eventually wander back home and you'll be glad you kept your

  • cool and didn't make him mad.

  • And that's my Two Cents.

Hey guys, like many of you, we're sheltering in place.

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