Best January Ever
…or, at least the best in a long time!
If you have school-aged children and live on the east coast, you (like me) have likely been scrambling to figure out child care and the litany of other school-cancellation issues. As a last resort, sometimes the only option is to bring the kids into work with you. Certainly, it’s not ideal, but we are fortunate in that the Meridian offices are well-equipped to host children from time-to-time. Netflix is available on the TV, the internet connection is strong, and we even have coloring books and puzzles on hand (thanks Yakel family!).
Of course, the kids think it was the best January ever, since they didn’t have school for many days during the month. I have to admit that I miss being excited for snow, but as an adult, it’s mostly a big pain in the rear. Beautiful? Yes. Annoying after it sticks around for way too long? Also, yes.
I hosted my two girls for parts of a couple of days last week. They were very well behaved, but even an office with the above-mentioned amenities gets pretty boring after a while. After a client meeting one day last week, I returned to my office to discover no kids and silence! Prior to heading into our conference room, I had left them coloring and chattering away. An impromptu game of hide and seek had broken out, and apparently, I was the unwitting seeker. My youngest (as usual) quickly gave their hiding spot away with her endless giggling.
Lyla and Molly hiding under Dad’s desk
While there were no snow days for the markets, January did represent the best performing January since 1987 (yes, that’s a weird sentence). The S&P 500 was up 8.0% and the Dow Jones Industrial Average was up 8.7%. All other global indexes were up as well, which was certainly welcome after a very bad end to 2018. Grabbing a recent headline from Goldman Sachs: “If you missed the January rally, you likely missed the 2019 gain.”
S&P 500 YTD Performance
Source: Macrotrends.net – https://www.macrotrends.net/2490/sp-500-ytd-performance
I think that’s painting things with a little too broad of a brush, but the overall point is a good one. It’s yet another example of when staying the course has proved wise in the face of short-term volatility. And, you can’t guess when a recovery is going to occur. Admittedly, that’s an easy thing to write and say, but when it’s actually happening to your hard-earned money, it can be hard to put into practice.
As we tell our clients, the key is to understand how your particular mix reacted at the end of 2018. Were you comfortable with seeing that level of decline given your time horizon? What was your reaction? Sell, hold, or buy more? The answers to these questions can help give some insight as to whether or not your investment mix is appropriate for you. Obviously, none of us like to see losses, but they are a harsh reality we face as investors. And, history (while not an indicator of future performance) has shown that running and hiding under a desk (selling) is usually not the best course of action.
Nathan