Hello, and welcome to our market alert video for today, Friday the 13th 2022. Before we dive into all the carnage that’s happening in the markets and all the doom and gloom and everything else, I want to share with you a quick story. So, I have competition in my life. This is who it is right here. This little guy is my grandson, Nathaniel. As I get older, I get less cute. As he gets older, he gets cuter. So, my daughter texted this picture to my wife and me and my wife’s response was, I’ll be there tomorrow! This baby is a three and a half hour drive away from us. She got in the car, and she drove. So, I haven’t seen my wife in two days. She just said, “I have to go kiss those cheeks!” So, this whole grandfather thing, it’s for the birds. I have to tell you, I’ve lost my wife. I’ve got competition and I can’t beat him. He’s too cute!
Anyway, let’s talk about what’s going on. As you guys know, our belief system, for people who are over 50, who are retired or retiring soon is that growth is important but protection of principal is even more important. Right now, if there’s ever been a time, in our view, for you to be looking at protection of principal, it would be now. I’ve got two things here that I wanted to share with you. One is by Bob Farrell. Now Bob Farrell, you may not have heard of, but he’s a legend on Wall Street. He’s 90 years old at this point but he invented the technical analysis of stock movements, you know, looking at the technical side of it. So that tells you over the decades, he’s been through every bear market since the 60’s. So, he’s been around the block a few times, he’s got what I believe is an excellent set of rules that you can find online. He calls the list “10 rules for investing”. I want to share with you number eight. Number eight, says “Bear markets had three stages, sharp down, guess what we’ve had this year, reflexive rebound, we had that this year, and then a drawn out fundamental downtrend.” So, it appears based on his analysis that we’ve been through the first two of the three stages of a severe bear market. He says he thinks that this one is going to be one of the worst that we’ve seen in his career. Remember I said, he’s been through quite a bit!
One of the things also that happens during bear markets is that you have these very big up days, these huge up days, the 20 largest up days, since 1929. 19 of them occurred during terrible bear markets like 2008, Y2K, and the Great Depression. This year, we’ve seen a down of 6.7%, a down of 4.4%, followed by big up days. Those up days represent significant ups. Again, those tend to happen during bear markets.
So, there’s another person that I think is something that we should pay attention to his name is Jeremy Grantham. For four decades, he’s been calling market bubbles. In fact, he called the Y2K bubble, he called the 2008 bubble, and he also called the Japan bubble in 1989. He said that we are in what he’s calling a “super bubble” right now. He says I wasn’t quite as certain about this bubble a year ago, as I had been about the tech bubble of 2000, or I had been about Japan, or as I had been about the housing bubble of 2007. I felt it was highly likely but perhaps not nearly certain. He said today, I feel it is just about nearly certain. He’s predicting, believe it or not, that the S&P is going to go down another 35% from here.
Now will all these things happen? I don’t know. What I do know is that if you are over 50, if you are retired or retiring soon, if you don’t have a strategy to protect against large debilitating losses that could cause you not to be able to retire or will cause you to have to un-retire, then it will cause you to have to rearrange your lifestyle and change a lot of stuff. Those are all terrible things that I wouldn’t wish on anyone. So, what I encourage you to do is to think about how you would protect yourself against the downside? If you don’t have a plan for that we do we have our investment protect strategy. We believe that staying in for bear markets is not a good idea. So, our strategy told us to sell in November of 2007, before the big crash of 2008. Also, you know, our strategies is not perfect, it doesn’t call everything super properly, nothing does, but at least our strategy is there to protect against major declines. I encourage you find out more about it, talk with one of our retirement planners, and you can find them at our website RPOA.com. So, thank you for watching this video. I wish you well, and I will talk soon!