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The Pain can be Strong…the Reaction Must be Stronger.

Jake discusses this week’s market volatility and revisit’s the market disrupting events over the years and how staying the course in your plan is imperative.


  1. Equity Markets – were mixed this week with U.S. stocks (S&P 500) up 0.46% while international stocks (EAFE) fell -1.12%.

  2. Fixed Income Markets – were lower with investment grade bonds (AGG) down -0.25% while high yield bonds (JNK) fell -0.85%.

  3. Fed Clarity – This week Federal Reserve Chair Jerome Powell endorsed an interest rate hike in March and that policy makers are prepared to act as needed to combat inflation acceleration. With a hike in March all but confirmed, market forecasters are now in debate on how aggressive of a hike we will see with investors now pricing in a 20% chance of a 50-basis point hike.

  4. Week of Volatility – Previously mentioned Fed comments, combined with geopolitical risks and lingering Covid-19 concerns has seen the VIX index (a gauge of volatility) remain elevated. The index reached new heights for 7 consecutive days, but historically speaking spikes like these have led to smoother deviations going forward.

  5. Key Insight – [VIDEO] Jake discusses this week’s market volatility and revisit’s the market disrupting events over the years and how staying the course in your plan is imperative. [ARTICLE] Ben writes about three ways to instill positivity and confidence when facing uncertain markets and how taking advantage of the “dips” will help in the long run.


The Pain can be Strong… the reaction must be Stronger.

Ben Klundt

It is not the good times that define a person, but the tough times and how one chooses to react. The same can be said for the market and how we respond in the “bad times.” As I write this (mid-week,) we’ve seen the Nasdaq retreat about 14% YTD hitting correction territory, the S&P pull back is right around 9%, and the Dow Jones is down roughly 6%. Let me clarify by acknowledging when I say, “the bad times”, I don’t mean impending doom. Rather, one is starting to feel pressure or that slight anxiety that awakens the little voice in one’s head that drives the protection mindset and tries to guide us toward foolish decisions.

To combat the little voice, I want to share with you three positive actions to implement before and/or in a time of struggle to respond with strength.

#1 Stick to the plan – If you don’t have one, GET ONE!

The adage of those that fail to plan, plan to fail, is accurate. The reason being is when the times of trouble come, we don’t know what our key values/goals are and how we plan to achieve them. Meaning, we are more likely to make an emotional decision based on what seems right for the moment, rather than what we ultimately want out of life.

The financial plans we create with our clients are grounded in realistic market movements, as defined by both realized and theoretical possibilities based on historical patterns. We know a client portfolio and financial plan can withstand an array of possible pullbacks (such as these), because the plan has already been stress tested for it. This doesn’t mean we won’t temporarily be set back in our advancement toward our life goals, or we won’t see our portfolio returns drop temporarily. It simply means we can rest assured that when such setbacks come, they won’t be fatal to our plan.

Some good practices during tough markets include revisiting your plan and reflecting on the advancement you’ve already made, and/or reverting to the fundamentals of the plan and time periods prior when you felt like something “wasn’t working”, but ultimately overcame. This may lead to having more confidence in the plan.

If you don’t have a financial plan, let’s build it or if you’re needing a refresher on it for reassurance, we’re here.

#2 Take advantage of the “discounts.”

I have not met a person in my life who would rather pay full retail than purchase something at a discount. In these times you need to reshape your thinking and lean into the down markets. Investing using Dollar Cost Averaging (DCA) is a common theme with many investors we work with. The benefit of DCA is when you’re able to add money to your account regularly and the market happens to be experiencing volatility, you can take advantage of those swings by buying in some of the troughs.

You won’t hit them all perfect, but you’ll be able to lower the average cost of your positions by creating multiple purchases of the same holding over a longer period. This is what you can achieve when you send in money every month.

For those taking money out, having a monthly deposit to your checking account from your investment account essentially does the same thing (just in reverse). In that by not making a “call” once a year on when to pull money out, you “dollar cost average” out and reduce your risk of needing excess funds during a weak market.

If you have excess cash on the sidelines and been waiting for a time to put it to work, these can be great opportunities. We still have a strong market with record low unemployment, good corporate profits and a Fed that will ultimately not want to put that progress at risk. We will put cash to work using the method of Dollar Cost Averaging or taking advantage of the pull back if we’re in one.

#3 Gratitude: say good thing and focus on good things

When it comes to market threats, YOU, statistically, are your own biggest threat to the success of your portfolio. One emotionally charged trade can do irreparable harm to a portfolio, or at the least, set you back years. As your financial advisor, we are going to do our absolute best to bring you peace, not simply by reiterating positive mindsets, but by grounding our advice in both historical facts, current analysis, and of course the strength of your plan.

Mindset, as you’ve heard several of my colleagues say, is critical when you’re in a time of struggle. Personally, I find it best to say the things I’m thankful for. It may be corny to some, but when I am focused on the things in my life, I am happy and thankful for, the hard stuff becomes trivial. I can see with clear eyes and realize, “this too shall pass”. A temporary drop in my portfolio doesn’t mean my wife won’t love me anymore or that we lose the house. The things which are truly important in life are still there and your plan is still working. Step back, re-focus on the positive, then tackle the negative if it needs tackling (preferably with a good partner).

To be clear, lest any of the above come off condescending, when I say you should do…that is because it is exactly what I say to myself with regularity and what we say to each other here at TEN. When we say you need a good partner that reinforces good decisions, we live that advice ourselves and with regards to each other.

I share this message based on what I do personally in hopes some portion of it will bring you peace in the event you ever need it. We know you place a lot of trust in us at TEN Capital as your financial advisors and it truly means the world. If you need help with any one of these three points, or a reminder of your plan and the financial metrics we use when building them, give us a call anytime.

We’re always here and never want you to have an unnecessary moment of worry. Know that we are taking positive actions on your behalf during this time and playing close attention for opportunities.

As always, enjoy your weekend and call with any questions.

Ben and the team at TEN Capital

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