A Historical Perspective of Recessions & the Importance of Staying Invested

Melissa Kolcz |

We hope you are well and enjoying summer. For this edition of our e-newsletter, we offer a conversation with Beacon Financial Planning of Cape Cod's Investment Committee members Michaela Herlihy, CERTIFIED FINANCIAL PLANNER and Kelli Grew, CERTIFIED FINANCIAL PLANNER.

"As your quarterbacks to your financial plan we are monitoring your overall financial plan on an on-going basis. Notice we say, your financial plan, and not simply your portfolio. While portfolio performance is an important aspect of your overall financial health, portfolio performance is only one piece of all the moving parts. For that reason, we welcome you to remember that unless you've had a major life change (loss of job, death or disability that impacts your income, change in health status, etc.) it likely behooves you to stay invested."


Although market pull backs never feel good in the short term, recessions may not be as scary as you think. For education purposes, we offer the following chart.

"Some clients have been asking when the current market upswing will end. We remind you, market cycles don't die of old age, and trying to time when we've hit the peak can be a shot in the dark. We've developed an asset allocation that's appropriate for your goals, time horizon, and risk tolerance. Your financial plan is your benchmark; where did we think you were going to be this year vs where you are. Comparing yourself to what the S&P 500 or DJIA is doing will only lead you to forget the big picture. Plus, the numbers speak for themselves. Take a look at the chart below of how a diversified portfolio (60% in equities, 40% in bonds) did compared to the S&P 500 since 2000."


Thank you for your continued trust. If you have any changes to your overall financial situation, goals, or risk tolerance, please contact us to discuss further.

With gratitude,

Your Team at Beacon Financial Planning of Cape Cod, Inc.