On Being Weary

September felt like one of those months when the hits just kept coming. The stock market continued declining from mid-August’s high to set a new intra-year low on September 30. Hurricane Ian wreaked havoc in the Caribbean and the southeast US. Queen Elizabeth II passed away, ushering in a new monarch the same week as a new Prime Minister began her term. Protests erupted in Iran over women’s rights. The war in Ukraine escalated, and there’s more missile activity from North Korea. The US dollar strengthened but what does that do to the global economy? Sheesh. The headlines just didn’t stop.

And in our personal life, we attended a family funeral, celebrated a birthday, and traveled for a family wedding – all within one week. We enjoyed the pleasant drop in humidity but dealt with copperhead bites (yes, multiple) on a friend’s dog in our yard. We worried about some family members living in Ian’s path in Florida while driving through the North Carolina mountains and getting our first look at some fall colors. Talk about whiplash!

I think many of us are feeling weary with everything going on in the world and in the markets. Sometimes we are more numb to the negativity than other times. Sometimes we respond in fear. Sometimes we are able to stay grounded and stay the course for the long haul. But then the hits just keep coming. Bonds, which usually provide reprieve from volatility in stocks, are not helping offset the equity decline. The Federal Reserve continues to raise interest rates with hopes of slowing inflation from rising at such a fast clip, but at what impact?

Geoff aptly titled last week’s Brief “Don’t Panic,” as we are wont to do when our environment seems so out of our control. You and I don’t control the Federal Reserve’s decisions, global weather patterns, OPEC, Congress, stock market returns, etc. We can control our reaction to these events and keeping a long-term perspective proves to be a calming technique. Although when weariness takes over, a certain amount of distrust starts seeping in and filling our minds (at least this happens to me!). When it feels like we’re standing on shaky ground, can we still trust the foundation? If we change our approach, will we have better outcomes and leave the weariness behind?

I believe the times during which we feel weary can be the most important times to rely on the foundation. In the investment world, that means we go back to focusing on what we can control. Our investment philosophy at Beacon is built on what we can control: minimizing costs, investing tax-efficiently, eliminating market underperformance, and avoiding behavioral mistakes. Although diversification is not providing the same benefit this calendar year as we’ve seen in the past, we don’t want to allow the weariness to distract us into drastically changing course.

Below is a recent graph from J.P.Morgan that shows the highest and lowest return that you could have gotten during various time periods (1-year, 5-year rolling, 10-year rolling, and 20-year rolling), going all the way back until 1950. The chart compares historical returns for stocks (using S&P 500 Shiller Composite), bonds (using Bloomberg Aggregate), and a 50/50 portfolio, rebalanced annually. Starting on the left side of the graph, you can see that the potential 1-year range of outcomes is quite large for all three sleeves, but especially for stocks. In one year, stocks have returned as high as 47% and as low as -39%! As you move toward the 20-year rolling averages on the right side of the graph, the importance of time in the market stands out as a way to mitigate risk. The blended, diversified portfolio did not have a negative return over the 5, 10, or 20-year rolling periods.

The indices used in this graph do not exactly line up with the investments in our Beacon models but the point about diversification remains the same. It highlights the importance of having an appropriate time horizon along with a diversified portfolio – and staying the course for the long haul. If you’re retired, you may not have the same amount of time as you once had, which can make a bear market feel even scarier. A great post called “Surviving a Bear Market When You’re Done Saving” speaks to that reality and offers the reminder that there is an opportunity for increased yield now, which hasn’t been available in 10+ years.

The news and economic outlooks may not be great right now and I want to acknowledge the weariness we may feel from the markets, news headlines, and maybe just life in general. Rather than allowing how we feel about the world to dictate our next move, these are the times when it is of utmost importance to continue focusing on the fundamentals of investing and financial planning. We hope we can be sounding boards as you process life and navigate making decisions.


The content above is for informational and educational purposes only. The links and graphs are being provided as a convenience; they do not constitute an endorsement or an approval by Beacon Wealthcare, nor does Beacon guarantee the accuracy of the information.

Ellen Martin
[email protected]

After graduating from UVA (go Hoos!), I moved to Raleigh for the Raleigh Fellows program where I fell in love with the city, its people, and a fellow Fellow who is now my husband, Wesley. I worked for another wealth management firm in Raleigh for seven years before joining the Beacon team in June of 2021. When not at work, you can most likely find Wesley and me walking our dog, Ollie, on the lovely Raleigh Greenways, or enjoying a cup of coffee and a La Farm white chocolate baguette.