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A Millennial Encounters a Bear

April 14, 2020

Posted in Economics

If like many millennials you’ve been a casual observer of your retirement investments over the last decade, you may have become accustomed to seeing your account balance rise nearly every year since the Great Recession 1.

1 S&P 500 Historical Annual Returns 2010-2019 Past performance is no guarantee of future results. Index performance presented does not reflect the deduction of advisory fees, transaction charges, and other expenses, which would reduce performance. Indexes are unmanaged. It is not possible to invest directly in an index.


Many millennials—a generation broadly defined as born between 1981 and 1996—are early into their investing career, and the historic market downturn of 2020 is their first experience with a dreaded “bear market”. For the uninitiated, a bear market is when a market experiences a 20% drop from a recent high point2. To be clear, I should note this is my first experience with a bear market as well, as I am a card-carrying member of the millennial tribe. As a young, aggressive investor I became acclimatized to positive returns and rosy performance reports for my retirements accounts. I confidently believed I was a rational investor who knew all about the volatile nature of investing, particularly in stocks, and that I was fully prepared for any roller coaster ride. Then 2020 arrived. My mettle was tested in what would be the quickest drop into bear market territory (20 days!) in history. As Mike Tyson so eloquently put it, “Everybody has a plan until they get punched in the mouth.”  When I watched the markets, seemingly in freefall day after day, I felt those same gut-wrenching emotions and urges to get out that every investor feels, millennial or otherwise. However, there are a few principles that millennials may consider when that account balance stops going up and to the right.

Focus on your goals

If your entire retirement account (e.g. 401(k) account) was invested in stocks, you likely saw your account drop by more than 30% at one point during March. Yikes. If you take a step back, though, and remember that retirement won’t occur for multiple decades, it can help you zoom out and view this crisis as a single point on your timeline, not the only point. Is your goal to maximize the return of this account over your career? Then a more aggressive investment strategy—heavier on stocks—may be for you. Can’t stomach an event like this? Perhaps you should consider mixing in more bonds designed to smooth out the ride. Not sure which stock and bond options to pick? Many retirement plans offer target-date funds where the amount of stocks and bonds adjust over time to match a pre-determined timeline to retirement. When you know the long-term goals for each of your investment accounts it may make the short term more palatable.

Prioritize what’s in your control

Looking at a world turned upside down by coronavirus it’s easy to feel out of control. Looking at your investments as they tumble by hundreds, or thousands(!), in a single day can make you feel helpless. What can you do? Take a deep breath. Turn off the news. And, acknowledge what you can control. You can control whether you stay invested or decide investing for retirement isn’t for you. You can control whether you see this as a massive loss or an opportunity to buy investments on sale (if appropriate). You can’t control the micro, but you can choose to see it from the macro.

Educate, don’t fixate

When all the headlines indicate the sky is falling it’s easy to join the ranks of the distraught. One of the most common misconceptions we see is clients thinking when “the market” is down X percent, they’re down X percent too. Rarely is that the case. (For a bit more on this topic, take a look at the video our CEO put together on how our portfolios are designed.) More than likely your account will look quite different than “the market.” Taking time to educate yourself on what you’re personally invested in, and what terms like “allocation,” “diversification,” and “volatility” mean can go a long way in turning clickbait headlines into digestible news.


From one millennial to another, I hope these principles–which we instill in our clients no matter their generation—help you deal with the turbulent times we find ourselves in. Stay safe, keep connecting with your loved ones, and continue to reach out to us with your questions and concerns.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.  This information should not be relied upon by the reader as research or investment advice.  This information is for educational purposes only.

There are risks involved with investing, including loss of principal.  Diversification may not protect against market risk. 



1’>S&P 500 Historical Annual Returns




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