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A Stock Market Lesson to Remember

Stuart Cooper
Stuart Cooper is a financial advisor with  Consumers Financial Group.

Confidence can quickly erode, but it can also quickly emerge.

 

Provided by Stuart Cooper, CRPC®, Gerran Batterberry & Michael Pozzi

Undeniably, spring 2020 has tried the patience of investors. An 11‐year bull market ended. Key
economic indicators went haywire. Household confidence was shaken. The Standard & Poor’s
500, the equity benchmark often used as shorthand for the broad stock market, settled at

2,237.40 on March 23, down 33.9% from a record close on February 19.1

On April 17, the S&P closed at 2,874.56. In less than a month, the index rallied 28.5% from its
March 23 settlement. And while past performance does not guarantee future results, there is a

lesson in numbers like these.1

In the stock market, confidence can quickly erode – but it can also quickly emerge. That

should not be forgotten.

There have been many times when economic and business conditions looked bleak for stock
investors. The Dow Jones Industrial Average dropped 30% or more in 1929, 1938, 1974, 2002,
and 2009. Some of the subsequent recoveries were swift; others, less so. But after each of

these downturns, the index managed to recover.2

Sometimes the stock market is like the weather in the Midwest. As the old Midwestern cliché

goes, if you don’t care for the weather right now, just wait a little while until it changes.

The stock market is inherently dynamic. In tough times, it can be important to step back from
the “weather” of the moment and realize that despite the short‐term volatility, stocks may

continue to play a role in your long‐term investment portfolio.

When economic and business conditions appear trying, that possibility is too often dismissed or
forgotten. In the midst of a bad market, when every other headline points out more trouble, it

can be tempting to give up and give in.

Confidence comes and goes on Wall Street. The paper losses an investor suffers need not be
actual losses. In a down market, it is perfectly fine to consider, worry about, and react to the
moment. Just remember, the moment at hand is not necessarily the future, and the future

could turn out to be better than you expect.

 

Stuart Cooper, CRPC® may be reached at 847‐672‐1833 or [email protected]
Gerran Batterberry may be reached at 847‐672‐1291 or [email protected]

Michael Pozzi may be reached at 847‐672‐1292 or [email protected]

 

 

Keep in mind that the return and principal value of stock prices will fluctuate as market conditions change.
And shares, when sold, may be worth more or less than their original cost.

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting
party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note ‐ investing
involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal,
accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent
professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the
purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment
or insurance product or service and should not be relied upon as such. All indices are unmanaged and are not illustrative of any
particular investment.

 

 

Citations.
 
1. WSJ.com, 2020
2. USAToday.com, March 21, 2020