For any of you that have seen the movie Gladiator, Russell Crowe plays a captured prisoner named Maximus. There is a scene where he is forced to fight alongside other prisoners against the Romans in an arena designed for the entertainment of the citizens. It seems like an impossible task, but before the battle begins Maximus tells his fellow prisoners that they must not break rank, as they are outnumbered and are at a huge disadvantage.
The Romans enter the arena riding chariots, circling the gladiators grouped in the center of the arena. A few prisoners abandon the plan and go out to fight alone. The outcome for these lone prisoners is lethal as they are immediately overcome by the Romans. Maximus and the remaining prisoners that stuck to their plan ended up holding off the Romans and their chariots to claim victory.
You are probably wondering what this has to do with investing. Well, the prisoner’s strategy to hold their position and follow the plan worked! This is similar to our strategy with investing. When we put a plan in place, we help clients determine appropriate levels of risk in relation to their assets and goals. This plan accounts for things like spending needs in retirement, returns and inflation. If we look at the U.S. stock market, it is down -24% year-to-date. While this isn’t comfortable for any investor, it has happened before.
S&P Intra-Year Declines vs Calendar Year Returns
Not every year ends positive for investors, that’s just the reality of investing. Recessions and negative market returns are normal; they just might not feel like that after 18 of the past 22 years yielding positive returns in the U.S. equity markets. History has shown that the investors that are able to stick to the plan during the down months and years are the ones that are rewarded with the long-term positive returns. We remain confident in our approach for clients and our game plan hasn’t changed. We make wise investment decisions on behalf of clients, make changes when changes are necessary and stay the course and weather the storm.
Please do not hesitate to reach out to our team of professionals should you have any questions or concerns about your portfolio. We continue to stand ready to assist you with your financial planning and investment management needs.
