ivan marjanovic

This is one of the best short clip segments I’ve heard all year. It’s a message I try to urge my friends and family to internalize. In today’s world, everyone is so conditioned to believe that all you do is “buy stocks on every small dip.” It’s almost a Pavlovian cultural response. But what many people don’t realize is that you can go decades with no real nominal return and that’s when sequence risk becomes very real. People don’t believe it because they haven’t experienced it. On the flip side, I’m not even entirely sure the economy could sustain a 3 year period where the market is down 40% and simply remains there. So many 401(k)s, savings accounts, and target-date programs would be absolutely obliterated, given the embedded leverage that is naturally baked into the overreliance on US equities. In addition to that, there are now money managers stepping into roles where they are responsible for real risk, yet haven’t actually traded through a true event in which market volatility is both sustained and recurring. I’m not trying to sound like a perma-bear, because that mindset can be just as flawed. But when you really dig into the data, you realize there are many periods where markets pull back and don’t just immediately recover. But everyone has become so used to the last 10 years, it’s not even a consideration that it can occur.