When Everyone is in Agreement

“When all the experts and forecasts agree – something else is going to happen.”

– Bob Farrell, Wall Street Market Strategist

September and October have brought cooler weather and, along with it, volatility to the markets.  Neither are unexpected. Season are seasons, and September has historically been the weakest month of the year for stocks.[1] The S&P 500 ended September with a 4.8% decline which was only the second down month for 2021.  October is also considered to be a volatile month for investors. The 1929 “Black Tuesday” stock market crash occurred on October 29, 1929. The “Black Monday” Crash of 1987 took place on October 19, 1987.  And while the fall of Lehman Brothers technically started when the company filed for bankruptcy on September 15, 2008, October 2008 experienced major market declines as we steamrolled our way into the financial crisis. Even as recently as 2018, U.S. markets lost $2T in October.

Knowing When to Sell

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

We are almost 10 years into a bull market birthed out of The Financial Crisis, throughout which, economists have described the stock market as climbing a “wall of worry”. The market continues to rise, but no one believes that it can continue. I am confident that at some point we will experience a correction. I am also confident that, many years from now, the companies we own will be much more valuable than they are today.

Investment Opportunities in Every Market

“In the struggle for survival, the fittest win out at the expense of their rivals because they succeed in adapting themselves best to their environment” – Charles Darwin

 

2016 ended exactly how we predicted…..or perhaps the opposite of that. Election results contradicted most polls, and the market’s reaction to the Republican win was not the Armageddon that I expected. In fact, the Dow, Nasdaq and S&P indexes all improved more than 2.5% from the election to year-end.  Benjamin Graham, the man considered to be the father of value investing, taught that “stocks aren’t pieces of paper or lottery tickets; they are units of ownership in real businesses whose underlying value does not change

Year 1 – What We Have Learned

As we enter the fall, we are approaching the one-year anniversary of launching Richie Capital Group. We have spent much of the past year navigating regulatory requirements, launching early clients and preparing our platform to support larger institutions. We have also spent some time researching the market to better understand client needs, competitor offerings, and how RCG can be best positioned to provide solutions.

We have found that the problems facing clients both big and small are largely the same. In terms of retirement, most individuals have not saved adequately and are not on track for a comfortable and timely retirement. Many of the public pension funds set up for teachers, first responders and government employees are significantly underfunded.

The National Institute on Retirement Security completed a study[1] on retirement savings and found: