“If the phone doesn’t ring it’s me” — Jimmy Buffett
It’s funny how time heals temporary temptations and laps of reason. I wrote the piece below on October 16, 2014. Then the Dow was down from a recent peak and investors were scared. But those who followed their long-term investment plan and didn’t panic, made it through. Yesterday the Dow closed at 26,157.16. Investors who panicked and sold missed all that. Tomorrow markets could drop again, but if you prepare yourself with a diversified, income focused portfolio and the determination to stick to an investment plan that avoids risk whenever possible and seeks to build a portfolio for the long-term, you shouldn’t be worried. Here’s what I wrote then:
Are we having fun yet? Since peaking at 17,279.74 on September 19, the Dow Jones Industrial Average Index has lost 6.6% of its value. If you haven’t been investing very long, this is what it’s supposed to feel like. During bull markets it’s easy to say “I’m a contrarian” or “I’m in it for the long-term.” It’s harder to actually do.
You may be surprised to hear this, but my phone hasn’t been ringing a lot over the last couple of weeks. I’ve spent many hours, over many years, preparing my clients for times like these. I’m on the phones all day, but it’s me calling them to reiterate the investment plan, not them calling me in a panic.
I’ve been telling clients this correction is good for the markets. And it has been long overdue. I’m not stressed out, I’m confident in our dividend centric approach—because at the end of the day dividends are still being paid and are being reinvested at better prices.
It’s a good feeling when clients are comfortable with our investment approach. And if the phone doesn’t ring, it’s a good sign that they are. I’ll still call, but if the phone doesn’t ring it’s me.
Read the entire Dead or Alive? The Future of Long-Term Investing series.
E.J. Smith - Your Survival Guy
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