Financial advisors in Troy NY
Helping you prepare
for your financial future
We're a team of investment advisers committed to protecting the financial future of our clients.
We're a team of investment advisers committed to protecting the financial future of our clients.
When fielding client phone calls regarding their concern about the recent pullback in the equity markets, we begin with a review of how well the market has done over the past couple of years and note that certainly a period of consolidation, whatever the catalyst, is healthy as it helps build the proverbial “wall of worry” upon which bull markets are built.
HOWEVER, we certainly understand why many of the callers are not satisfied with a recap of where the market has been as that is akin to providing yesterday’s weather. They are justifiably concerned about where we believe the market is headed. Although not our base case, the intent of this Chart Talk is meant to address the fear of many that perhaps this correction will progress into a bear market.
Before looking at the chart below, keep in mind that of the 27 market corrections since 1974, only six have become bear markets. That said, as the chart indicates, if history is any guide, the average length of a bull market (63 months) is nearly three times as long as the average bear (14 months) and returns nearly five times (182%) of what has been lost (-36%).
Data from 12/12/1961 to 2/19/2025, which is the current peak of the latest bull market. The market is represented by daily price returns of the S&P 500 index. Bear markets are defined as periods with cumulative declines of at least 20% from the previous peak close. Its duration is measured as the number of days from the previous peak close to the lowest close reached after it has fallen at least 20% and includes weekends and holidays. Periods between bear markets are designated as bull markets. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. Past performance is no guarantee of future results.
We also know that no matter where the bottom is to this pullback, in order to achieve long-term success as an investor it is important to check your “emotions at the door” as that enables one to focus on their long-term objectives which in turn allows for better decision making.
It is futile to attempt to predict the short-term direction of the financial markets. However, we believe in time that through information gathering and subsequent research, our clients are well positioned to weather any further pullback and yet are well positioned to benefit from a subsequent recovery.
Should you have any questions or wish to review your portfolio, we welcome your call.
“This presentation is not an offer or solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable, but its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. Fagan portfolio characteristics and holdings are subject to change at any time and are based on a representative portfolio. Holdings and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities listed.
Additional information including management fees and expenses is provided on our Form ADV Part 2. The actual return and value of an account fluctuate and, at any time, the account may be worth more or less than the amount invested. Bond Investments are affected by interest rate changes and the credit-worthiness of the issues held in the portfolio. A rise in interest rates will cause a decrease in the value of fixed income positions. Past performance results are not indicative of future results.”
When you’re going through a market correction, the last thing you want to hear sometimes is “stay the course”. We hear this all the time as investors, and while you’re in the midst of it, inaction can be hard. That’s not to say rebalancing back into your correct asset allocation isn’t a prudent thing to do, but that should take place periodically throughout the year. Below is a chart of the cost of timing the stock market that was put out by JP Morgan Asset Management. As you can see, if you invested $10,000 in the stock market in January 2003, and kept it invested until December 2022, you would have $64,844. If you had missed just the 10 best days in the stock market during that time, your gains would have been cut in half, with a total of $29,708. On top of that, 7 of the 10 best days in the stock market during this time took place during a bear market – which is psychologically the hardest time to stay invested.
Although it may be uncomfortable, “staying the course” turns out to be the right move historically. If you plan to retire at 60, and live until 80, based on historical metrics, you will live through 4 or 5 20% corrections – you will need to get comfortable being uncomfortable, especially as the retirement world has shifted away from the pension and toward the 401k which puts the stress of saving for retirement onto the employee.
“This presentation is not an offer or solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable, but its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. Fagan portfolio characteristics and holdings are subject to change at any time and are based on a representative portfolio. Holdings and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities listed.
Additional information including management fees and expenses is provided on our Form ADV Part 2. The actual return and value of an account fluctuate and, at any time, the account may be worth more or less than the amount invested. Bond Investments are affected by interest rate changes and the credit-worthiness of the issues held in the portfolio. A rise in interest rates will cause a decrease in the value of fixed income positions. Past performance results are not indicative of future results.”
Over the past few years, the stock market has been marked by a striking divergence between a handful of dominant technology-driven stocks and the broader equity market. This divergence is most clearly illustrated by comparing the performance of the Magnificent 7 - a group of the largest and most influential technology and growth stocks—and the Invesco S&P 500 Equal Weight ETF (RSP), which weights each company within the S&P 500 equally.
As the Magnificent 7 (Apple, Microsoft, Amazon, Nvidia, Alphabet, Meta, and Tesla) has surged, their dominance has propelled cap-weighted indices like the S&P 500 (SPX) and Nasdaq 100 (NDX) to new highs. Meanwhile, the RSP ETF, which reflects the performance of the average S&P 500 stock rather than being skewed toward a few giants, has significantly lagged.
As is illustrated from the chart below, since the start of the year, we have been seeing a shift in sentiment in that the RSP (Invesco S&P 500 Equal Weight ETF) has risen 0.05% drastically outperforming the Roundhill Magnificent Seven ETF (MAGS) which has dropped 9.5%.
Despite the recent volatility in the equity market, the fact that it remains within a few percentage points of its all-time high, despite negative sentiment, implies that investors WANT to be invested. That said, we believe investors will be divided between those who believe tax cuts and deregulation will continue to be a positive force on the economy and stock market as opposed to those that worry about inflation, market volatility and the unorthodox policies of the Trump Administration. As long as the consumer and labor market remain strong, there will be a floor in the stock market. Should future data imply otherwise, so will the support for stocks at these levels.
“This presentation is not an offer or solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable, but its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. Fagan portfolio characteristics and holdings are subject to change at any time and are based on a representative portfolio. Holdings and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities listed.
Additional information including management fees and expenses is provided on our Form ADV Part 2. The actual return and value of an account fluctuate and, at any time, the account may be worth more or less than the amount invested. Bond Investments are affected by interest rate changes and the credit-worthiness of the issues held in the portfolio. A rise in interest rates will cause a decrease in the value of fixed income positions. Past performance results are not indicative of future results.”
