Success happens now - Prospero Wealth

I tell everyone that they have to be wired backwards to make money. There's this huge temptation when the chips are down, as they are now, to feel like you should protect the downside. But as Charlie Munger would tell you, "Invert, always invert." A much more valuable thought would be, "How do I take advantage of what the market is giving me?" There are far more market opportunities for the long-term investor today than there were even a week ago, and the upside belongs to those people who can see those opportunities and move with purpose while everybody else freaks out.

First of all, let's start with the fact that things are not actually that crazy. Check out the diagram below. It's from the Vanguard Investment Advisory Research Center and it shows that since 1980, the market has been in correction territory ~30% of the time.

Or take a look at the next one, which shows the variability you can expect in differing levels of asset allocation. A bad year for a 100% stock allocation has been as bad as -43.1%!

I struggle to find things to say when markets behave like they have in the last week. That's not because there's nothing to say. It's because I feel like I'm repeating myself. I guess some people just need to hear it again with different words:

Individual financial plans are built to accept this volatility. Risk is a feature we utilize to access higher long-term gains. Nobody should accept full market risk on assets that are needed as cash inside of 7 years. If your time horizon is longer than 7 years, check back and see how things look at that point; today's panic will have likely subsided.
If your plan calls for you to be saving, you especially need to do that while the markets are down. If you fail to buy the market while it is on sale, you are overpaying and will experience lower overall returns.
In fact, if you are wired correctly, you should do what you said you'd do on your risk tolerance questionnaire. Remember that thing you filled out where you said that your response to a massive market correction would be to buy more? It's time to make good on that promise. You didn't invest more during the housing collapse or COVID. What will you do with tariffs?

I want to quote the ending of a piece I read today from Vanguard, because I think they nailed it:

Long-term investing success happens now
We knew such a day was coming. Sharp market downturns are a surprise only in their timing, not in their mere occurrence. This day was coming because it always comes. How we’ve prepared and what happens next is of the utmost importance. Don’t chase the markets; in times like these, they’re wild and unpredictable. Now is the time to call on that discipline you signed up for if you’ve adopted our Principles for Investing Success.
Eventually, and not necessarily in this order, volatility subsides, markets bottom, and dances end.

I tell everyone that they have to be wired backwards to make money. There's this huge temptation when the chips are down, as they are now, to feel like you should protect the downside. But as Charlie Munger would tell you, "Invert, always invert." A much more valuable thought would be, "How do I take advantage of what the market is giving me?" There are far more market opportunities for the long-term investor today than there were even a week ago, and the upside belongs to those people who can see those opportunities and move with purpose while everybody else freaks out.

First of all, let's start with the fact that things are not actually that crazy. Check out the diagram below. It's from the Vanguard Investment Advisory Research Center and it shows that since 1980, the market has been in correction territory ~30% of the time.

Or take a look at the next one, which shows the variability you can expect in differing levels of asset allocation. A bad year for a 100% stock allocation has been as bad as -43.1%!

I struggle to find things to say when markets behave like they have in the last week. That's not because there's nothing to say. It's because I feel like I'm repeating myself. I guess some people just need to hear it again with different words:

Individual financial plans are built to accept this volatility. Risk is a feature we utilize to access higher long-term gains. Nobody should accept full market risk on assets that are needed as cash inside of 7 years. If your time horizon is longer than 7 years, check back and see how things look at that point; today's panic will have likely subsided.
If your plan calls for you to be saving, you especially need to do that while the markets are down. If you fail to buy the market while it is on sale, you are overpaying and will experience lower overall returns.
In fact, if you are wired correctly, you should do what you said you'd do on your risk tolerance questionnaire. Remember that thing you filled out where you said that your response to a massive market correction would be to buy more? It's time to make good on that promise. You didn't invest more during the housing collapse or COVID. What will you do with tariffs?

I want to quote the ending of a piece I read today from Vanguard, because I think they nailed it:

Long-term investing success happens now
We knew such a day was coming. Sharp market downturns are a surprise only in their timing, not in their mere occurrence. This day was coming because it always comes. How we’ve prepared and what happens next is of the utmost importance. Don’t chase the markets; in times like these, they’re wild and unpredictable. Now is the time to call on that discipline you signed up for if you’ve adopted our Principles for Investing Success.
Eventually, and not necessarily in this order, volatility subsides, markets bottom, and dances end.

I tell everyone that they have to be wired backwards to make money. There's this huge temptation when the chips are down, as they are now, to feel like you should protect the downside. But as Charlie Munger would tell you, "Invert, always invert." A much more valuable thought would be, "How do I take advantage of what the market is giving me?" There are far more market opportunities for the long-term investor today than there were even a week ago, and the upside belongs to those people who can see those opportunities and move with purpose while everybody else freaks out.

First of all, let's start with the fact that things are not actually that crazy. Check out the diagram below. It's from the Vanguard Investment Advisory Research Center and it shows that since 1980, the market has been in correction territory ~30% of the time.

Or take a look at the next one, which shows the variability you can expect in differing levels of asset allocation. A bad year for a 100% stock allocation has been as bad as -43.1%!

I struggle to find things to say when markets behave like they have in the last week. That's not because there's nothing to say. It's because I feel like I'm repeating myself. I guess some people just need to hear it again with different words:

Individual financial plans are built to accept this volatility. Risk is a feature we utilize to access higher long-term gains. Nobody should accept full market risk on assets that are needed as cash inside of 7 years. If your time horizon is longer than 7 years, check back and see how things look at that point; today's panic will have likely subsided.
If your plan calls for you to be saving, you especially need to do that while the markets are down. If you fail to buy the market while it is on sale, you are overpaying and will experience lower overall returns.
In fact, if you are wired correctly, you should do what you said you'd do on your risk tolerance questionnaire. Remember that thing you filled out where you said that your response to a massive market correction would be to buy more? It's time to make good on that promise. You didn't invest more during the housing collapse or COVID. What will you do with tariffs?

I want to quote the ending of a piece I read today from Vanguard, because I think they nailed it:

Long-term investing success happens now
We knew such a day was coming. Sharp market downturns are a surprise only in their timing, not in their mere occurrence. This day was coming because it always comes. How we’ve prepared and what happens next is of the utmost importance. Don’t chase the markets; in times like these, they’re wild and unpredictable. Now is the time to call on that discipline you signed up for if you’ve adopted our Principles for Investing Success.
Eventually, and not necessarily in this order, volatility subsides, markets bottom, and dances end.