Twenty Lessons Learned

As the wheels fall off the market, now is a good time to reflect on some of the timeless lessons we learned during a very specific period in time.

  • Nothing lasts forever. When growth stocks were going up every day, it felt like it would never end. Now that growth stocks are going down, it feels like it will never end. Everything ends, eventually.
  • Survival is the most important thing. Your portfolio must be able to weather euphoria, panic, and malaise.
  • Risk management is most critical when it feels like you’re getting punished for managing risk.
  • Nothing is a perfect inflation hedge. Not gold, stocks, crypto, or cash. Different inflation hedges work in different inflationary regimes. No one size fits all.
  • Diversification is the only answer to an unpredictable future. If everything is working, you’re not really diversified.
  • Interest rates matter a lot. The cost of money is the lifeblood of the economy and the psychological north star for investors.
  • Nothing is risk-free. The S&P 500 is down 16% year-to-date. Intermediate-term “risk-free” government bonds are down 20%.
  • You’re not a genius on the way up or an idiot on the way down.
  • When everything is going down, everybody loses money.
  • Analogs are dangerous. We know how things played out in the past. That doesn’t tell us how things will play out in the future.
  • The more confident somebody seems, the more cautious you should be in taking their advice.
  • Inflation is unpredictable.
  • Memes are not fundamentals.
  • Nobody knows what will happen next.
  • There are no new paradigms.
  • Past performance is not indicative of future performance. Past behavior is.
  • Too much leverage will eventually come back to bite you.
  • Cash is not trash.
  • You didn’t know this was going to happen. You don’t know what’s going to happen next.
  • Investing is hard.

It’s important to never let a bad market go to waste. Our portfolios might be down, but we can learn and grow from experiences like this.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.