What a difference a year makes. Just about every major asset class lost money in 2018. In 2019, pretty much everything went up. A lot. It is at times like this, when we have extreme market results—positive or negative, that irrational thinking can come to the surface. For example, in the wake of the 2008 financial crisis and subsequent market sell-off (a very extreme negative event), the investor roller coaster of emotions led to feelings of fear, panic and capitulation. The following year markets recovered and started that path of strong market gains that we are still on. Whereas, after a strong year like 2019 (a very positive event), the roller coaster may lead to excitement, thrill and risk-seeking. Continuing with my boat at sea metaphor, now would not be the time to throw the life jackets over-board just because we had a nice stretch of sun and wind behind our back. The appropriate thing to do would be to check supplies, equipment, charted course, and plan for the potential weather ahead. In the investing world, this would be a portfolio rebalance and a task Mosaic Pacific Investment Advisors is targeting for Q1 and Q2.
Thank you for your confidence and support in what we love to do.
Cory Michael Nakamura CFA, CFP, PPC
Chief Investment Strategist