To say that March 2020 was a volatile month for the stock market would be an understatement. With the outbreak of the coronavirus and ensuing economic lockdown, the market ultimately dropped by some 40% before rebounding with the help of government-approved artificial stimulus. Financial markets around the globe were equally volatile — and to some degree, that volatility continued for years afterward.
The speed and severity of the COVID-19 outbreak, combined with the massive social and economic consequences, were a reminder about the importance of understanding risk and protecting your financial assets as best you can. Historically speaking, they weren’t the first such reminder, and you can bet they won’t be the last.
In this report, I’ll discuss how some of the most recent market crises have influenced my philosophy and business model and awakened an entire generation to the practical value of investing for income.
A Look Back in History
On a personal level, the coronavirus crisis reminded me of when I watched the dot com-com implosion tear apart the markets in 2000, and when I saw so many peoples’ fortunes decimated during the 2007-2009 stock market collapse. Those events, like the coronavirus, took many advisors and investors by surprise — but not me.
In 1999, while most Wall Street cheerleaders seemed to believe that the sky was the limit, I believed something completely different. My knowledge of stock market history led me to believe that a big market correction was right around the corner. I knew from my interpretation of basic historical trends that the market was going to take a turn for the worse. The trends also told me that there would be a series of dips over the next 15-to-20-plus years.