We have gone over 33 months without a 10% correction in the stock market.

At some point we are bound to have a correction.  It is normal and you should welcome it as part of your investing journey.  Think of it as “stocks on sale” and a chance for you to rebalance toward your risk tolerance and target allocations.  When it comes to investing, we need to focus on our long term goals: to maintain our lifestyle in retirement and still have money at age 95.  Any short term money (needed in 5 years or less) really should only be minimally invested in stocks.  When you look at rolling 10 year periods, the compound returns of stocks consistently look very good compared to other investment options.

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in the corrections themselves.” — Peter Lynch, Mgr Fidelity Magellan 

Here is a link to our Q2, 2014 market commentary – QMR_Q2_2014

Key items of interest:

• Page 2 – keys to success in 2014
• Page 3 – asset class returns for YTD and last 10 years
• Page 4 & 5 – yes, markets seem to be at least fairly valued
• Page 6 – there are still many reasons to believe in capitalism / stocks over the next 5 to 10 years
• Page 9 – look at other market peaks for stocks or recessions and how a 60/40 portfolio did 1 year after, 3 years after and 5 years after.
• Page 13 – bonds provide stability for the portfolio and typically do well in times of crisis

Check out our new website.  Find out Why DFA may be a better solution for your portfolio than Vanguard Funds, American Funds or Fidelity Funds.

Summertime is a great time to revisit your goals – Check out our blog – Hit Your Retirement Goals Faster!

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Enjoy the rest of your summer and if you have over $500k in a portfolio and would like a free 2nd opinion about your strategy, give us a call.  Your retirement will thank you.

All the best,

Todd