In spring 2020, the reality that the United States had lost control of COVID-19 was hitting home.
Shutdowns were rolling out across the country, and it was clear that our economy was about to take an unprecedented hit.
With the normal time period to develop a vaccine being 10 years, we had no reason to believe that the pandemic wasn’t going to last years.
These were scary times – not just for our portfolios but also for the safety of ourselves and our loved ones.
Yet, while our economy got crushed and the pandemic raged (and still continues to today), the spring of 2020 was an incredible buying opportunity.
The market bottomed on March 23 and then roared almost 70% higher in just nine months.
Investors who bailed out of the market in the midst of the March panic sold at the worst possible time.
Hopefully Wealthy Retirement was able to help you stay the course during that volatile time.
Even better, I hope you were able to take advantage of the opportunity that the stock market presented.
On March 20, just days away from the stock market bottom, I predicted that the worst of the stock market volatility was behind us.
Now, I most definitely did not “know” that March 2020 was going to be the market bottom.
Anyone who says they are certain about such things either is lying to you or is a fool.
What I did strongly believe, however, was that based on historical precedent, the chances that we were close to a bottom were very, very good.
Warren Buffett has said that the way to become rich in the stock market is to “be fearful when others are greedy and greedy when others are fearful.”
There is an abundance of hard data around proving that buying stocks when things look bleakest pays off…
And in A Wealth of Common Sense by Ben Carlson, I found a pretty incredible dataset that proves this.
The table above plots the rate of unemployment against stock market returns.
The numbers are stunning…
There is a direct correlation between unemployment levels and stock market returns.
The best time to buy stocks is when unemployment levels are high.
The worst time to buy stocks is when unemployment levels are low.
After I found this table, I printed it off and taped it on the wall directly in front of my computer.
I want this hard data in front of me so that it gets drilled into my brain.
I also want to be able to look directly at this data the next time the economy turns sour and the market collapses.
It will help me hold my nerve when things are scary and be cautious when everyone else is overcome with greed.
I hope being aware of it can do the same for you.