• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Invest with Steve!

Financial Planner | Financial Advisor | La Verne, CA |San Dimas, CA|Glendora, CA| Claremont, CA | West Covina, CA| Covina, CA| Brea, CA| Pomona, CA | Upland, CA Reh Wealth Advisors

Stephen Reh CFA® MBA CFP®

I love helping people reach their financial and investment goals. Call me today at 909-518-2134 to setup a free no obligation 1 hour consultation.

NAPFA-Registered Financial Advisor
  • Home
  • Ideal Clients
    • Financial Advisor For Business Owners
    • Financial Advisor For Corporate Executives
    • Financial Advisor For Families
  • Services
    • Investment Management
    • Retirement Planning and Cash Flow Analysis
    • Net Worth Planning and Analysis
    • Estate and Gift Planning
    • Property and Casualty Insurance Review
    • Education Planning
    • Tax Planning
  • Our Articles / Blog
  • About Steve! Your Fee Only Financial Advisor
    • Reh Wealth Advisors LLC Privacy Policy
  • Online Account Access
  • Contact Us

Corona Virus – Market Update

March 12, 2020 By Stephen Reh MBA CFA® CFP®

Today saw the largest one day drop since 1987 as fear of the corona virus hit the markets. Most market indexes are now down 20% from their high which is what qualifies as a market correction. In 1987, the market dropped over 22% on what is referred to as “Black Monday”.

When Was the Last Market Correction?

Our last market correction of 20% occurred less than 2 years ago in the second half of 2018. It was not as fast as this most recent drop, but markets recovered very quickly in 2019.

Wait, why are some outlets saying we haven’t had a correction since 2008?

I really do not know. They seem to be ignoring the definition of a market correction which by definition is a drop of 20%

How Quickly did we recover from 2018’s Drop?

By April of 2019, the S&P500 had fully recovered from the 20% drop that occurred from late August through December of 2018.

Source: https://en.wikipedia.org/wiki/Closing_milestones_of_the_S%26P_500

Do you see any other times in history that might be a guide?

I do see some parallels with 9/11 in that the world as we previously knew it seemed to be changing and we faced fears we had not seen before.

Due to fear and concerns over the financial firms inside the World Trade center the stock market stopped trading until 9/17. The NY stock exchange opened on 9/17 with a 7% loss and continued to lose over 14% for the week. It was one of the largest 5 day losses the market had seen.

Less than one month later the stock market had regained its pre 9/11 levels

https://www.investopedia.com/financial-edge/0911/how-september-11-affected-the-u.s.-stock-market.aspx

What if we have another 2008?

What do I mean by 2008? I mean another “worst stock market of our lifetime” period. How long did it take to recover from the 2008 stock market?

The recovery came swift and a return to value

  • 40% stocks/60% bond portfolio recovering by November 2009
  • 60% stocks / 40% bond portfolio recovering fully by October 2010
  • The 100% stock S&P500 recovered full by March 2012

The Takeaway

Time periods like we are experiencing now are very challenging for investors. Time periods such as we are in now are tempting to feel that there is no relief in site. However, looking at history, we can see that the stock market, our economy, and country have recovered from even the worst of time relatively quickly. Its persisting through times such as we are in now that allows up to capture the upside of investing. Market timing is tempting and “feels right” when times are rough, however, research has shown us that market timing is extraordinarily difficult (need to be correct over 70%-80% of the time) and in most cases, trying to time the market has hurt our portfolio returns. We are reminded of the “average investor” returns the past 20 years from this slide:

Had the average investor since 1998 simply picked any other the other asset classes and stuck with it, they would have performed better. Further, they did not even outperform inflation.

I will continue to be vigilant in monitoring your portfolios and to ensure we are acting in prudent matters. Please do not hesitate contacting me if you have any questions.

If you enjoyed the article consider sharing it:
Tweet

Filed Under: Articles, Investments, Market - Economic Analysis

About Stephen Reh MBA CFA® CFP®

I am Steve Reh the founder of Invest with Steve and Reh Wealth Advisors LLC. Thank you for visiting my website.

Contact me to setup your free, no obligation, 1 hour consultation.

Primary Sidebar

Our Articles

  • Articles
    • College Savings
      • 529 Plans
    • Estate Planning
    • Financial Planning
    • Investments
      • IRA Rollovers
      • Market – Economic Analysis
    • Investor Protection
    • Mortgage
    • Property and Casualty Insurance
    • Retirement Plans – 401ks
    • Tax Planning
    • Uncategorized

    Contact Steve For Your Free, No Obligation, 1 hour Meeting.

    Your Name (required)

    Your Email (required)

    Subject

    Your Message

    Our Most Recent Financial Articles

    2022 May Stock Market Drop

    The S&P500 has not hit the “20%” mark for a market correction but we have hit 14% drop since our last market high for the year. I wanted to provide you some analysis and commentary but ultimately we will want to remain patient and not attempt to time the stock market. Early in the Year […]

    SBA EIDL Updates

    THE SBA HAS RELEASED THE FOLLOWING UPDATES (PLEASE NOTE ALL THAT FOLLOWS IS FROM THE SBA). On March 29, 2020, following the passage of the CARES Act, the SBA provided small business owners and non-profits impacted by COVID-19 with the opportunity to obtain up to a $10,000 Advance on their Economic Injury Disaster Loan (EIDL). […]

    Small Business Help – EIDL and PPP

    There are two programs for small business owners, the EIDL loan/grant and the PPP (payment protection plan) loan. Both offer assistance for small businesses. Information is coming out rapidly and the details do seem to be changing slightly as it comes out. EIDL – Economic Injury Disaster Loan This loan is taken out directly from […]

    View Stephen Reh,CFA® MBA CFP®'s profile on LinkedIn

    Footer

    Invest With Steve!

    Stephen Reh CFA® MBA CFP®
    Reh Wealth Advisors LLC
    466 W Arrow Hwy Unit K
    San Dimas, CA 91773
    Mobile:909.518.2134
    Office:909.962.8023
    steve@investwithsteve.com


    Connect with us!

    • Email
    • Facebook
    • LinkedIn
    • Twitter


    Our FInancial Articles/Blog

    Financial Links

    Contact Us
    • Home
    • Ideal Clients
    • Services
    • Our Articles / Blog
    • About Steve! Your Fee Only Financial Advisor
    • Online Account Access
    • Contact Us

    Reh Wealth Advisors LLC is a registered investment advisor offering advisory services in the State of California and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by Reh Wealth Advisors LLC in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant an applicable state exemption. All written content on this site is for information purposes only. Opinions expressed herein are solely those of Reh Wealth Advisors LLC unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.


    Anyone with facing challenges with accessibility of this website, please call us at 909-962-8023 or email us at steve@investwithsteve.com and we will provide accommodations for our services to you. We have a tool bar to increase contrast and to change text size. We have attempted to make our site as accessible as possible.