With emotion and fear still prevalent, investors are questioning portfolio decisions leading up to the current bear market. In this Denver Business Journal article, Kevin McNab explains how The Three Little Pigs provide a lesson in building wealth.
The stock market entered the year riding the longest bull market in history. Although economic growth was muted and the stock market sent subtle warnings of things to come, Americans continued to bask in superb market returns and low unemployment. After some warning tremors, the negative economic impact of COVID-19 gripped the markets at the end of February, resulting in the quickest decline to a bear market (a drop of 20% or more off the highs) in history. In a one-two punch, health and economic fears paralyzed the world. Investors were left with portfolios that portrayed too much confidence while not aligned with actual risk levels and goals. The downside damage to portfolios left investors without a chance to react, leading to many sleepless nights.
While this was a tough lesson, investors caught off guard can learn from this decline and make the appropriate changes moving forward. That lesson may be best summed up by the fable “The Three Little Pigs.”…READ MORE!