Current Market

It is never enjoyable experiencing major downturns in the market.  What makes living through this current environment even more difficult is the pace at which the markets have fallen, and the fact that fixed-income values haven’t been spared due to panic selling and widening spreads.  We’ve seen daily moves that often equate to annual returns during more normal times.  Markets do not like uncertainty, and there is an incredible amount of uncertainty revolving around Covid-19.  This will have an end-point, and when the clouds do break, whether in weeks or a month or so, a market recovery will begin very quickly.

As our clients at Windsor know, our philosophy is grounded in needs and risk based targeted asset allocation.  Some clients are 100% fixed-income, some clients all equities, but most clients have a balance of both based on a mutual agreement after a needs and risk assessment.  The plan in times like this is to stick to the plan and remember that a retirement plan is for the long-term.  The reason for having an allocation to equities is for the long-term sustainability of retirement cash-flow.  No one should invest in equities if the time horizon for their portfolio is less than five years.  As Warren Buffet has said, “I don’t know what the stock market will do today, tomorrow or next year, but in five years it will be higher than where it is today”.  Even with the recent market decline, the stock market has an annualized return between 7 and 10 percent over the last 7, 10, 15, 25, 30 and 50 years.  Every now and then, like right now, the stock market reminds us investing is a long-term endeavor.  The reason to have an allocation to fixed-income in your portfolio is for emergency needs within five years, and more importantly, to act as ballast to the risk and volatility of equities.

For balanced portfolios, the key to a faster recovery after a drawdown is to rebalance portfolios back to their target allocation.  As asset classes drift apart, we rebalance the portfolio taking advantage of what we see as temporary downturns.

Our sole purpose at Windsor is to make sure we focus on long-term portfolio sustainability.  We can’t do that by changing our foundational beliefs, advice and counsel when faced with headwinds.  Invest, diversify, rebalance, discipline, is not just something we say, it’s our underlying philosophy, and it works.  Retirement and cash-flow planning is viewed and managed as a marathon, not a sprint.  We do understand the fear and uneasiness this current situation is creating, so please, do not hesitate to call or email your Windsor manager with any concerns, or simply just to talk about your plan. 

20860 N Tatum Blvd. Suite 220, Phoenix, AZ 85050  | 480.515.3514

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