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  • Writer's pictureThomas Hayes

Year In Review: Weathering The Storm

Coming into the end of 2023, the S&P 500 is up 23.47% year-to-date, after a sell off of 19.44% in 2022.[1]  This year has really highlighted the benefits of sticking to your guns, your target investment allocation so to speak, through the ups and downs of the market. I would argue having a portfolio that matches your risk tolerance is only half of the equation, you have to be able to stick to that allocation through thick and thin.

But how can we make sure we don’t fall victim to our own worst instincts to cut and run, or change things up, when things get bad in the market?  I think the most important factor when investing over the long term lies outside of your main investment portfolio, with your emergency fund and your savings for short-term goals. They can give you the ability to weather the storm of market drawdowns, without having to tap into to your long-term investments.

In every rolling 20-year period since 1926, the S&P 500 has produced a positive return. That’s a 97-year sample size including The Great Depression, World War II, The Korean War, The Cuban Missile Crisis, The Vietnam War, 9/11, The Great Financial Crisis, the COVID pandemic, and countless other events that corresponded with market selloffs that would have given anyone pause about sticking to their investment allocation.  However, if you have a properly sized emergency fund, and savings to fund your short-term goals, it gives you the ability to look past these events, knowing that in the short term, you have a cushion to weather to the storm. 


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.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

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