A couple of months ago, I shared a high-level overview of a few ETFs and how they had performed. Since then, a couple of the ETFs hit new highs before dropping slightly down to where they were at the close on 9/16/20.
I am using VTI to review the US stock market, VXUS to review stocks outside the US, AGG to review the US bond market, and BNDX to review bonds outside of the US. See the chart below.
You can tell by looking at the prices that, generally speaking, these ETFs started the year with an increase, had a sharp decline during the pandemic, and have subsequently climbed out of the pandemic low to either a full or almost full recovery.
What can we learn from this?
To put it simply- we don’t know what will happen but that is okay. Few predicted the pandemic’s crash, fewer still also predicted this quick of a turnaround, and fewer still (some may argue zero) will continue to accurately predict all stock market movement from now on.
A disciplined long term approach to investing will put the vast majority of investors on the best course for their financial future.
Interesting Article(s) or Video(s)
Dimensional - Is the Stock Market Divorced From Reality?
Given the increase in stock prices, many are asking if the stock market is "divorced" from the economy as a whole. Weston Wellington gives his take in this article.
Thank you for reading! What other lessons can we learn from the recent market downturn?