Winston Churchill: “Stand firm and carry on!”
A Brief History Lesson

Germany defeated most of Europe in the early stages of World War II. England was next. The English people faced imminent invasion and destruction. Who could stop Hitler? Winston Churchill was England’s prime minister. His army and people were shell-shocked by Germany’s quick victories. Some argued that England should surrender and ask Germany for peace terms.

What was Churchill’s response? No. The British people would face a difficult future if he sued for peace. He told his countrymen, “Stand firm and carry on.” Keep fighting, don’t give up and carry on with daily life activities. He inspired his countrymen and the war later turned in England’s favor.Staying Confident in Stocks Amidst the Face of volatility.

Volatility
Nobody likes to see their stock portfolio go down. Many stocks declined 20% or more last December 2018. One year’s gain vanished in one month. $100,000 invested December 1 was worth $80,000 December 31. $1,000,000 was worth $800,000. Yikes! You lost either $20,000 or $200,000 on paper. You felt terrible and sick in your stomach.

First, volatility has always been in the market and will always be in the future. This is the risk we accept in investing.

Second, determine what percentage of you and your money are you comfortable investing? The answer is somewhere between 0 to 100%. Invest that percentage in the stock market. Put the rest in cash and bond accounts.

Bingo! You now have a diversified portfolio of stocks, bonds and cash. You won’t make as much as a portfolio 100% invested in the stock market. The good news is you won’t lose as much when volatility occurs and the market declines.

Third, time in the market, not market timing is your solution and friend. Your portfolio will go up and down during a 1-2 year period. It should go up over a 5-10 year period. Cash out some of your profits.

The Connection
Winston Churchill and the British people faced a life and death struggle in World War II. His resolve and determination are inspirational. His fight was much more important than you and I worrying about the stock market.
Please remember 3 points next time the stock market volatility hits you in the stomach.

1) Take a breath and acknowledge your gratitudes.
2) Remember your percentage comfort level investing.
3) Remember Winston Churchill: “Stand firm and carry on.”

Acknowledgement
I thank Robert Ramirez, aka “RJ” for asking me to write about this topic. RJ, this was a great topic! What did you like or dislike about this story? What would you like me to write about in future topics?
You can call me at 415 515 7985, send me an email at dan@danedwardsinvestments.com.