Morphing Market

November 21, 2022

What if you could hop in a time machine for your portfolio and go back to the start of the last bull cycle in 2009? What would you do differently? The answer is simple: buy equities – ideally U.S. equities in the form of the S&P 500. Then turn off your monitor or access to updates/quotes and set it and forget it for a decade or so. Or if you really wanted to trade, BUY THE DIP. Anytime the market weakened, buy some more. We now know that asset allocation took a back seat, as did some fancy investment strategies. Simply put, embracing the full volatility of the market was rewarded.

Unfortunately, time machines don’t exist, but you can build a portfolio based on 20/20 hindsight anytime. And this looking-back investment approach arguably does the most damage to investor portfolios. Without the benefit of hindsight, what led to this nice upward and relatively smooth ride starting at the end of 2009?