It Ain’t Different This Time

Good day,

In life we become wiser by learning from our experiences but for some reason this doesn’t always apply to investing. We tend to quickly forget past experiences and make the same mistakes again and again and/or have the same fears and anxiety we’ve previously experienced during multiple periods of market contraction.

One of the best things advisors could do for their clients is to use recent examples to point out this phenomenon, in an effort to guide them to a successful and less emotional investment pathway.

From January 1st to October 3rd of this year (191 trading days), the S&P500 saw a 9.42% increase, but over the short period of the next 18 trading days (October 4th – 29th), that same index dropped 9.72% and the index’s entire year’s gains were eliminated resulting in a -1.21% return for the S&P500 from January 1st – October 29th. Undoubtedly this led certain investors to question their decision to invest in the markets. They may have wondered if their advisor lost his/her mojo in a month, paid attention to their accounts etc.

Over just the next 8 trading days (October 30th – November 8th), the S&P500 bounced back 6.27% and the index’s year-to-date return is once again positive again (4.98%). As such, it’s not impossible that the next 5% or so needed to bring the index back to its October 3rd high, couldn’t occur in a matter of days/weeks.

After reading this, some readers might feel a sense of relief and remove market decline worries from their list of problems, switching focus to other things going on in their lives. The better thing investors could do today is to spend a little time reflecting on how they felt and/or reacted during October and try to hang on to that memory longer than just a handful of days. If we add the impact this October’s market action had on us to the inventory of our experiences, perhaps we can better assess market action the next time around.

Charts below – Have a good weekend!



Jan 1 – Oct 3: 191 trading days

Oct 4 – Oct 29: 18 trading days

Jan 1 – Oct 29:

Oct 30 – Nov 8: 8 trading days


Danny Popescu

“I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of Harbourfront Wealth Management. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by Harbourfront Wealth Management Inc.”

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