I got to do a lot of cool stuff when I was working as a sportscaster. But the coolest thing I could have done was the thing I never got to do. I wanted to fly in a fighter jet.
The Navy’s Blue Angels used to come to Punta Gorda, FL for air show, and they would put local TV personalities in the cockpit behind the pilot (Goose’s seat for Top Gun fans) and show the video on the news to promote the air show. Every year, I was nominated to be the back-up plan, in case the person at our station wanted to be in the plane but couldn’t make it. The last time I volunteered, they told me to go the airport just in case. I showed up, hoping to get my chance. Our station representative, who was a meteorologist and relatively new addition to the morning show team, also arrived as planned. I got sent home.
The next day, I saw my colleague in the newsroom, and I teased her a little bit about taking my spot in the cockpit. The blood drained from her face. “Oh, Brian, it was terrible!” she said. “I got so sick. It was miserable.” And here’s the thing, as much as I wanted to be on that plane, there was a part of me that was relieved not to be. I knew I might have hated it as much as she did. I’m no thrill seeker. Some people do not belong in the cockpit of a fighter jet.
I tell you that story to tell you this: the stock market is a rocket ship. It can race high into the sky, and sometimes people crash and burn. Some people love the ride, while others can’t even stand the ride from Goose's seat. And no amount of coaching, no amount of assurances that it will all work out in the long term, no amount of historical data can make it right for them. As people get closer to retirement, with more money at stake and less time to recover from a crash, even the most experienced investor may want to move more of their portfolio to safer assets.
The S&P 500 has almost doubled since 2000. Along the way, it has suffered two 50 percent drops. It’s easy to say, with the benefit of hindsight, that the market always comes back. But who wants to sign up for that ride, especially since you don’t know when the next crash is scheduled to occur? My colleague Jared Traum likes to refer to “market crashes” even for relatively small declines. If you call him on it and say, “A 10% loss is not a crash, it’s a correction,” he’ll tell you that no one has ever come to him after they lost money in their portfolio and said, “Oh, I used to have too much money in my account. Now, I have the correct amount.”
Managing an investment portfolio is about managing behavior and managing expectations. There’s no shame in owning safe assets.
S&P 500 Index is a market index generally considered representative of the stock market as a whole. The index focuses on the large-cap segment of the U.S. equities market. Indices are unmanaged, and one cannot invest directly in an index. Past performance is not a guarantee of future results.