After nearly 40 years of studying markets, earning a masters degree and many certifications (CFP®, CFA®, CIMA, AIF), and witnessing every flavor of financial panic, I’ve come to a simple truth: there’s no secret to successful investing. But there is a right way to do it—one that’s less about market timing or chasing hot tips and more about discipline, patience, and understanding how markets work.
Early in my career, I was on a mission to uncover the “secrets” of investing. I devoured over one hundred books, completed the grueling Chartered Financial Analyst exams (one of the toughest in the world), earned multiple designations, and pored over 150 years’ worth of white papers on investing. I’ve taught classes, spoken at conferences, and advised countless clients.
So why mention this? Because most of what you hear—whether from traditional media, friends, salespeople, or social media—comes from unqualified sources. They compensate for their lack of expertise with sensationalism, preying on two of our strongest emotions: greed and fear. My background has taught me how to cut through that noise—to focus on what’s real, what’s proven, and what’s worked. It’s not about chasing the next big thing or panicking at every dip; it’s about understanding the patterns of markets and human behavior, then acting with discipline instead of reacting with emotion.
The Investing Basics You Need to Know
Here are the timeless truths of investing—simple, yet often ignored:
- Diversification is your best shield against risk.
- Risk and reward go hand in hand; high returns require some risk.
- Market timing and stock picking? The data says it’s a losing bet—luck, not skill, drives the wins.
- Hidden investment costs can significantly erode investment returns.
- Discipline beats everything. It means staying put when fear strikes and resisting greed when stocks soar.
- Beware of the ‘Financial Services’ crowd—many are salespeople profiting off your emotions, not your success.
Historical Market Returns
One of the first things we do with new clients is review historical market returns. We’re aware that most people would find this as interesting as watching water boil but there are some great lessons that can be learned from a basic understanding of how markets move.
- Volatility is normal and expected.
- On average, we have seen significant down years in the stock market every six years.
- There is an unpredictable randomness to market returns in the short term.
- Those who are disciplined and ride out the ups and downs will be handsomely rewarded.
- On the flip side, those who decide to “do something” based on the market or economy, have the odds stacked against them.
Zero Stress
If I weren’t aware of how my clients feel during market downturns, my stress level about today's market would be near zero. Why? Because I’ve seen this before. Every single time, people thought 'this time is different'—and every time, the market recovered. Sometimes quickly, sometimes slowly—but it always came back.
Here are a few of the times I remember in my lifetime when many proclaimed that it was the end of investing as we knew it:
1987 Crash: Black Monday, -22% in a day. Market ended the year up.
1994: Stocks flat, rare bond losses. Next year? S&P +37.6%, bonds +15%.
1997 Asian Contagion: Dow dropped 7.2% in a day, still finished the year +22.6%.
2000 Dot Com Bust: Tech crashed, but diversified portfolios survived.
2008 Financial Crisis: S&P down 50%+. Riders recovered; panic sellers didn’t.
2020 Covid Crash: Fear ruled, yet markets roared back by year-end.
2022: Bonds and stocks tanked together—a rare double whammy. Still, recovery followed.
Each felt like the end. None were.
Where We Stand Now
After a recent dip—down about 9% from last month’s all-time high—we’re still ahead of the scariest moments in our lifetimes. This too shall pass. I know job losses or economic fears can hit hard, but history says: stick to your plan. My advice? Turn off the news. Media thrives on fear—clickbait headlines don’t care about your long-term goals. Step away, breathe, and trust the process.
Earlier I mentioned that diversification was a key part of managing risk. Here are the year-to-date (as of 3/12/25) returns of some other asset classes that would be part of a diversified portfolio:
- The bond market is up over 2%
- International stocks are up close to 8%
- REITs are flat
Here are several articles I’ve written over the past few years as we’ve dealt with market volatility and economic disturbances. You may enjoy seeing what I said and how things turned out.
Mastering the Market: The Power of Patience, Simplicity and Historical Insight | Grand Capital Advisors – July 2024
Letter to Clients | Grand Capital Advisors – September 2022
A Recession is Coming – 8 Things to do Right Now! | Grand Capital Advisors – January 2023
Current Events and Your Financial Future | Grand Capital Advisors – March 2022
When Does Market Timing Work? | Grand Capital Advisors – July 2020
Stock Market Volatility | Grand Capital Advisors – May 2020
All my best,
Ken
