Dimensional’s Quarterly Market Review (Q1 2020)

You won’t be surprised to see all the red in returns for stocks this past quarter. But take heart at the green for bond returns. When stock markets are climbing upward, bond funds can seem so boring, but you see now how well they are doing their job of providing stability and ballast in your globally diversified portfolio that holds a mix of bond & stock funds (your asset allocation).

At SAGEbroadview we continue to evaluate the possible investment opportunities down markets might provide for you, including:

  • Rebalancing your portfolio when warranted, to stay on course toward your long-term goals.
  • Tax-loss harvesting where practical, to offset the costs of recently incurred and/or future taxable gains. (Yes, we still fully expect to see future market growth!)
  • Roth IRA conversions when they may benefit your retirement planning.
  • Seizing other opportunities when your plans call for it. For example, if you’ve been holding a concentrated stock position to avoid incurring taxable gains, now may be the perfect time to reduce your risks and strengthen your portfolio by selling all or part of that position.


But if you find you are struggling during these current conditions:

  • Ask yourself objectively: Can I tough out the fears I’m feeling right now? If so, we encourage you to stick with your existing investment allocations.
  • What if you decide: My portfolio is no longer appropriate for me. If that’s the case, let’s discuss next steps so we can adjust accordingly.
  • Another question we get during market extremes goes something like this: Why not get out of the markets temporarily until the worst is over?

We don’t recommend trying to accurately time when to get out of, and then jump back into volatile markets. While nobody knows exactly when a recovery will occur, history has informed us of what typically happens when it does. This recent Wall Street Journal piece explains, using the bull market that began back in 2009 as an illustration (emphasis ours):

“A surprising share of a new bull market’s returns pile up in its very early stages when people are most fearful. Take the one that ended last month. Putting $100,000 into an S&P 500 index fund on the day the bull began on March 9, 2009 and selling at last month’s peak would have seen that turn into $630,000 including dividends. Waiting just three months to make sure it wasn’t yet another head fake would have earned you only $450,000.”

In other words, while most of us are still assuming there’s no hope in sight, the markets can quietly and often dramatically make their big come-back … at least for those who have kept a portion of their wealth invested in them.

As always, without the ability to see what is only apparent in hindsight, we encourage you to focus instead on that which we can control. Right now, that is mostly doing all you can to keep yourself and your loved ones out of harm’s way.

Please let us know how we can help.

VIEW PDF: Quarterly Market Review (QMR) – Q1 2020

Sheri Iannetta Cupo, CFP®, Founding Partner (Retired) & Director
[email protected]

SAGEbroadview Wealth Management is a Fee Only firm offering ongoing financial planning and portfolio management, with tax planning woven carefully throughout our services. We work virtually across the country, with offices in Farmington, CT, Morristown, NJ, and Burlington, MA.