Gg's Greatest Hits

September 29, 2023
min. read

September has historically been the worst month for stocks, and this one was no different. The volatility is not at all unusual, especially after the rally through July.  So as we head into October (and the end of the year), what if anything, can be done right now? Here are our thoughts...

The good news is we’ve been here before.

Here are the last four Septembers for the S&P 500:

  • 2020: -3.92%
  • 2021: -4.76%
  • 2022: -9.34%
  • 2023: -4.9%
What should you do right now?

For starters, these declines, like all others before, are temporary. While we've had four consecutive years of negative Septembers, the fourth quarters (October-December) that follow have been quite different:

  • 2020: +11.69%
  • 2021: +10.55%
  • 2022:  +7.08%
  • 2023: ?
Perspective matters.

It's a tale of two lives. Do you live every second of these declines on the edge of your seat checking account balances and fretting over each scary headline? Or simply live your life and focus on what you can control?

Right now, we are in the midst of a 5%+ sell off. On average, there are three of those every year, this being our second of 2023. So, if this little blip has you rattled, buckle up, it's going to be a long, rough ride.

We’ve covered what to do in times like these in our blog, which is delivered to your inbox each and every month. Below are a few relevant for right now:

This an opportunity to buy a piece of America's greatest businesses at a discount.

Embrace this uncertainty don't fear it.

There are essentially two things to do during a market decline. One is to put excess cash to work. The second, in the words of investing legend and Vanguard founder Jack Bogle, "Don’t just do something, stand there."

In other words, do nothing.

Stick to your plan and live your life.

While this second option might feel like you are not accomplishing much, you are actually doing much, more than you think. By staying fully invested you are allowing the miracle of compounding to work it's magic on your portfolio. Reinvesting your dividends at lower prices and thus buying more shares of the best, most profitable and well run businesses on the planet.

The first rule of compounding is to never interrupt it unnecessarily.- Charlie Munger

While these times appear scary, the reality is when markets decline, risk is falling.

Prices are much more attractive today than they were just a few months ago.

Be a buyer of the fear, not a seller of the panic.

Like last year at this time at the October market low, we wrote to you it was time to get bullish. That was the right advice then and it's the right advice now.

Successful lifetime investing is based on patience, discipline and faith in the future.

One can always find something to worry about. However, nothing in the past few months, or years for that matter, has done anything to remotely cause us to lose our patience, abandon our discipline, or diminish our unrelenting faith in the future.

Our core principles remain steadfast... and unchanged.

While many are pessimistic about the future, I'm truly grateful. Right now is the best time to be alive ever in history. And it's an even better time to be a long-term goal-focused investor.

While it feels uncomfortable, the reality is "the market" has never lost anyone any money. It's investors themselves who create these losses and lose money investing "in the market."

In a world where the S&P 500 has increased more than 5x (including dividends) over the last 20 years and 10x over the last 30 years; anyone who says the market is responsible for their losses is delusional.

Accepting this as the inarguable fact that it changes everything.

The market, in the short run, is like a cranky baby. Happy one moment, in tears the next...with no explanation at all. Right now the market, and its "participants", are in the midst of another temper tantrum.

It's not different this time.

While there are some great links to a few of our "Greatest Hits" throughout this article, the complete library can be found on our website here.

If you haven't visited it yet, you should.

It’s a treasure trove of more than 50 of our Gg writings over the last decade on what to do during times like these as well as our professional advice on how to live your best life without worry about money. Read them at your leisure and, as always, reach out any time with questions.

This too shall pass,