The best investment advice we can give you in a year like 2022, is to double down. Seriously. When things get ugly, like they did in 2022, put more into your investments. Buy more assets at cheaper and cheaper prices and snatch up what everyone else seems to be panicking and selling.
This is hard advice for our clients, family, and friends to take, but it is the best advice none-the-less. So, most advisors go with the easier to digest advice; stay the course.
Markets like 2022 don’t come around often, but they are amazing opportunities to seize quality investments at discount prices. If you are putting money into a retirement or investment account, double your contributions. If you are taking money out of your investments, slow it down and delay it if you can. Rebalance your accounts by selling investments at high prices and buying those which have lost value.
Warren Buffett is famous for saying the wise investor should be “fearful when others are greedy, and greedy when others are fearful”. 2022 was a year of fear and panic; it was a great time for us to be greedy in the pursuit of building wealth.
Along those lines J.P. Morgan once said, “in bear markets,” (like 2022), “stocks return to their rightful owners”.
All of this is to say, TenBridge clients did a great job in 2022 by not only staying the course, but adding to investments in a manner they comfortably could. As a result, we did well last year. Our aggressive investors were only down on average -14.09%, in an S&P 500 market that was down around -18%. Our conservative investors were down too (because bonds were down as well as stocks), but they were only down negative -7.19%, in a Barclays AGG bond market down roughly -13%. Everyone else who has some mix of stocks and bonds were between.
We don’t know what to expect next, but we know last year was a once in a decade opportunity and we all took advantage of it. Yeah 2022. Now go away. 2022 that is.
This year we expect more of the same: volatility and some fear, favoring quality investments and a long-term perspective. There are so many wild cards out there it is hard to tell, but in over two decades of sitting in this seat, that statement has always been true.
Gambling is short term; investing is long term. Don’t watch the waves, keep your eyes on the horizon.
We are making small changes to our portfolios, but we love high quality income orientated investments. Over time, they are the single greatest creators of wealth and with inflation where it is, the best hedge against increasing costs and prices in the economy.
Everything in a TenBridge portfolio has a purpose; we are always happy to discuss it with you and review your account performance. But we will always keep our eyes on the objective – your goals and working toward them.
Just wanted to let you know you did well in 2022, for as horrible as it seemed. Your reaction, or more appropriate lack thereof, and our penchant for quality, led to a good year, even if it didn’t feel like it.
Let us know how we can be of service. It is always a pleasure.
From the desk of
Erik Lawrence CFP®