Dear [insert client first name],

I’m sure some of you remember the lyrics from the Grateful Dead song “Truckin”, “what a long, strange trip it’s been”. Lately, I’ve taken to humming that song every time more of the unbelievable pops across my news feed or I am beset by feelings of uncertainty over how and when the 2020 hangover will end. The Dead song goes on to say, “set up, like a bowlin' pin, knocked down, it gets to wearin' thin”. I think most of us can identify with that line all too well as we leave last year behind and move forward into 2021, worn out and ready for positive changes.

Like the bowling pin in the song, 2020 set us up with expectations of another year of bull market behavior and lulled us into putting the fear of a recession in the future. Then, the darkness settled upon us like something out of a Peter Jackson movie, and the equity massacre began. Only to be staved off when the Fed rode in to the rescue and cooled market nerves with an influx of capital and interest rate flexibility.

No one needs to be convinced of how strange last year was. However, what we may miss in the midst of the frenzy is that last year in the economy and the markets was a tutorial on the principles of successful long-term, goal-focused investing. While the events of 2020 were unprecedented, the market and economic outcomes were consistent with historical norms, which solidified two important and foundational lessons.

1. At their most dramatic turning points, the economy can’t be forecast and the market cannot be timed.

From a new all-time high on February 19th, the market reacted to the onset of the greatest public health crisis in a century by declining by a third in five weeks. Yet, the economy learned to work around the lockdowns and the result was that the S&P 500 regained its February high by mid-August.

This clearly illustrates why having a long-term plan and sticking to it—acting instead of reacting, is the most sane approach.

2. Never get your politics mixed up with your investment approach.

The second lesson of 2020 involved the presidential election cycle. To say that it was the most hyper-partisan in living memory would be euphemistic. Supporters of both candidates were genuinely convinced that the other would, if elected or reelected, signal the end of American democracy.

The result: reactionary investors exited the market and ended up losing out on significant gains. In reality, politics do not ultimately affect the market or the economy. If anything, they may cause short-term turbulence, but that is no different than what can happen on any given trading day.

With that, I will leave you all with a final word of wisdom from the Dead. “Sometimes the cards ain't worth a dime If you don't lay 'em down”. Stay in the market and ride it out, because long-term, intentional investing is always the smartest hand to play.

Warmly,

(Name)

Sources:

Murray N. (2021, January). The Lessons of an Exceptionally Instructive Year.   NMI Nick Murray Interactive. Retrieved from URL

Murray N. (2021, January). The Tortoise, The Hare and the Unicorn.   NMI Nick Murray Interactive. Retrieved from URL