Hello Investors!
It’s been a while since I’ve sent an update, but I’m happy to say that we are back for 2025!
Since it has been so long, it’s completely understandable if you don’t remember signing up for weekly investing updates, or if these emails are no longer relevant to you. If that’s the case, you should be able to easily unsubscribe at the bottom of this email. No hard feelings!
With that said, we have a number of new readers coming in from YouTube and other channels, so allow me to reintroduce myself: my name is Brian Dean, I’m a former investment banker with a Master of Science in Finance, and my goal here is to help you Master the Market through this free weekly newsletter. I also upload regularly to YouTube, and am building out a website with free investing resources at briandean.com. By following my content, you should have all the information you need to make better investing decisions and reach your financial goals, whether that’s Replacing Your Salary With Dividends, or Becoming a Millionaire the Lazy Way.
Now that we’re reacquainted, let’s talk markets!
Market Update
The stock market has had a decent start to the year, with the S&P 500 up ~4% and the tech-heavy Nasdaq up over 5%. With stocks having gone 80% over the last five years, it can understandably feel like investing in stocks is a no brainer. Sorry for the splash of cold water, but historically speaking this is not normal for the stock market. Just in the last 25 years, there have been SEVEN instances where stocks returned 0% over the course of a year or longer. Three of those seven periods lasted many years, with the longest being seven years from 2000 to 2007. Imagine seeing your portfolio stagnate for that long…so what should we do?
Here are a few steps you can take to protect your portfolio without missing out on future gains:
- Rebalance Quarterly: when markets are hot, you can quickly become over exposed to stocks. What was a balanced, 80/20 stock/bond portfolio last year may now be 90/10.
- Review Your Asset Allocation: A 100% stock allocation is all fun and games until the market drops 40%-50% in a matter of weeks. I like to use the 100-Minus Rule: Take 100 minus your age and that’s your stock allocation. In my case, that’s 69% (nice) in stocks, and the rest goes into bonds. In case you’re wondering, I recently adjusted my 401(k) to 60% stocks.
- Refrain from Trying to Time the Market: Extensive research shows that even if you could perfectly time the market, you wouldn’t make that much more than if you just invest when you receive your money (i.e. each paycheck). Don’t leave more cash on the sidelines than you absolutely need to.
Conclusion
That’s all for this week’s edition, and moving forward you can look forward to future editions being expanded with all the same great content I used to put out, including stock and economic analysis, personal finance tips, and updates on my own investment portfolio. See you next week!
-Brian
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