What you do makes the difference

What you do makes the difference

One of the topics that comes up when we take on new clients is how they fared during prior market declines. The basic characteristics of their experiences are consistent, with differing degrees of fearfulness, anxiety, confusion, or other unpleasantness expressed.

Each one of us was affected by COVID-19 in some way and we all saw the same upsetting news during 2020. The record setting stock market drop, the protests, and the vitriolic election rhetoric may not have upset us in the same way or to the same degree, but we were all made aware of these same events. Yet we are meeting prospective clients who have had very different investment returns through this pandemic. Why?

Simply put, these prospective clients got different results because of what they did in reaction to news.

Simply put, these prospective clients got different results because of what they did in reaction to news.

We face the same three choices about our investment holdings every day. We can sell some (or all), buy more, or hold. During the “corona crash” we put out a number of pieces urging clients to keep calm and reminding them that we knew what to do. The weighty evidence of history backs up our belief that during a bear market, diversified investors will end up doing better buying than holding and that holding will be better than selling. When we look at accounts from 2020, that is exactly what we see.

A drop is not a time to panic and abandon a sound strategy, especially a strategy that expects bad times periodically. No, it is a time to rebalance and employ other tactics which fit that strategy.

People who cut their stock market holdings invariably tell us they watched a lot of news and were convinced that things would not get better any time soon. It was a reasonable interpretation. When the lockdowns started in March of last year, more than a few people were sure we were headed for a depression. The consensus in the medical community was a vaccine was two years away.

Nonetheless, we were confident that of the choice to buy, sell, or hold, selling was the least likely to work. At that juncture, it was not a smart move for a sound investment plan and likely never will be a smart move after a large market decline. The people who opted to reduce their stock holdings had to be right about short-term market behavior and act quickly. However, we did not see anyone do both correctly.

In the end, it didn’t matter if the crash was due to the pandemic or something else. Past bear market dramas have always ended the same way and should end the same way in every future bear market. Businesses are adaptable and will adjust to the circumstances, the aggregate value of businesses (not necessarily any one business) should be more valuable in the future, and market values should reflect that. It’s just math and common sense. Buy low. Sell high.

Your investment results will likely be dictated by how well you react to this noise more than how the market reacts to news related to these concerns.

When (not if) the next nasty market drop comes, the news will be troubling and the temptation to believe it (because things are “different this time”) will be great. In the meantime, even without a bad market, you will have plenty of opportunities to make shortsighted decisions. Whether it be the markets, the economy, tax code changes, political matters, inflation fears, rising interest rates, growth vs. value, or the value of the dollar, there is always something to worry about and always will be. Your investment results will likely be dictated by how well you react to this noise more than how the market reacts to news related to these concerns.

When that happens, we will do all we can to remind you that the overwhelming evidence of history favors the disciplined, patient investor and just how unhelpful the media has been at navigating the market turmoil. We can also assure you we will do what needs to be done on your behalf.

News & Notes

Top financial advisor TampaTampa Area Taking Notice of New Office: As we announced in late 2020, we opened a new office in Tampa to meet rising demand for our services. The Tampa Bay Business Journal took notice and interviewed Mike Salmon, CFP® about the firm’s entrance in the area. There are many financial firms in Tampa, but our model stands out for its avoidance of the pervasive and problematic conflicts of interest in financial services. As Mike explained, “We charge a fee for service and advice, and there’s no sales or commission. [With the fee-only model], we are still the minority, but more people are aware of that and seeking out this advice. We believe we are on the front end of a change in our industry.”

Charlie Fitzgerald on radio show: On February 23, Charlie was the guest of Mike Gilland on the Christian radio program, “Afternoons with Mike.”  The program airs weekday afternoons on 1270 AM, The Shepherd. The hour-long interview covered a number of topics and allowed Charlie to share how God has led him and carried him through life.




Mike and Tommy serve as experts for webinar: As a public service, the Winter Park Health Foundation hosted a webinar, “Taxes 101 – Why Your Taxes Shouldn’t Be Taxing On You.” Four panelists helped explain how to account for stimulus payments, PPP funds, and other quirks of 2020. They also provided tips on how to begin to think “tax savvy” and optimize a tax strategy. Two of the experts were Mike Salmon, CFP®, EA and Tommy Lucas, CFP®, EA from our firm.

Changes at DFA: Dimensional Fund Advisors will be converting a few of its traditional mutual funds into Exchange Traded Funds (ETFs). What does this mean for clients who own these funds? First, the conversion will not trigger a significant taxable event, nor will clients incur any costs for the conversions. Second, the ongoing fund expenses, already among the lowest in the fund universe, will drop by approximately one third. Lastly, the ETF structure should provide even more tax efficiency to the already highly tax efficient funds. The downside? Sometimes trading gets a little tricky but we’ve used ETFs and handled those quirks for years for clients.


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Moisand Fitzgerald Tamayo, LLC is an Orlando, Tampa and Melbourne, Florida based fee-only financial planner serving central Florida and clients across the country. Moisand Fitzgerald Tamayo, LLC specializes in providing objective financial planning, retirement planning, and investment management to help clients build, manage, grow, and protect their assets through all phases of one’s life and the many transitions in between. If you have any questions or would like to discuss anything further, please give us a call or send us a note. If you are not a client and wish to receive emails notifying you of new posts – no more than once per month – fill out the subscription information in the sidebar to the right. For more frequent updates, follow us on FacebookLinkedIn, or Twitter.  

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Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Moisand Fitzgerald Tamayo, LLC-“MFT”), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. 

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About Dan Moisand

Dan Moisand is a fee-only financial advisor with Moisand Fitzgerald Tamayo, LLC. He is a regular contributor for multiple outlets, including Florida Today, MarketWatch, and The Wall Street Journal. His writing and financial advice have also been featured in Financial Planning, Investment Advisor, Wealth Manager/Advising Boomers, Forbes, Smart Money, and The New York Times, among other publications. He is the only two-time winner of the Journal of Financial Planning’s “Call for Papers” competition and has been named a top financial planner and advisor by multiple publications. Investment News named Dan one of the “twenty most influential men and women” in the history of financial planning. He currently serves on the Board of Directors for the CFP (Certified Financial Planner) Board.


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