March 9, 2020 was the 11th anniversary of the height of the worst global panic ever which marked the bottom of the bear market of 2007-09.
I was there then as I am here now.
Here’s what I’ve learned after 40 years of living through stock market volatility.
It is to me a thing of the most wonderful irony that the world has elected to celebrate this iconic anniversary with, you guessed it, another epic global panic attack.
As of March 9, 2020, the S&P 500 is down over 18% from its all-time high, recorded on February 19.
Declines of this magnitude are fairly common occurrences.
Indeed, the average annual drawdown of the S&P 500 stock index from peak to trough since 1980 is close to 14%.
But such a decline in barely a month is noteworthy, not for its depth but for its suddenness.
As we all know, the precipitants of this decline have been . . .
- the outbreak of a new strain of virus, the extent of which can’t be predicted
- the economic impact of that outbreak, which is equally unknown
- the onset of a price war in oil
The common thread here is unknowability.
We simply don’t know where, when or how these phenomena will play out. And in my experience, the thing in this world that markets hate and fear the most is uncertainty.
We have no control over the uncertainty; we can and should have perfect control over how we respond to it.
Or, ideally, how we don’t respond.
The last thing in the world that long-term, goal-focused savers and builders of wealth like you and I do when the whole world is selling is – you know – sell.
On March 3, the erudite billionaire investor Howard Marks wrote, “It would be a lot to accept that the U.S. business world – and the cash flows it will produce in the future – are worth 13% less today than they were on February 19.”
How much more true this observation must be a week later, when they’re down 18% or 
even if the index drops further.
So coach, what if it does decline tomorrow?
What matters is what markets ultimately do over your family’s lifetime, not what they do tomorrow.
If you have any doubt about where the world economy is ultimately headed, read Robert Bryce’s book Smaller, Faster, Lighter, Denser, Cheaper.
The stock market has experienced a 30% decline one in every five years since WWII.
Right now it’s offering the equivalent of a January White Sale on linens.