In this short video, Brad Pappas, founder of Rocky Mountain Humane Investing, explains why now is the time to play both offense and defense with your investment strategy. If you’re worried about losing the gains you worked hard for—or putting your retirement lifestyle at risk—this message is for you.
Transcript:
Introduction to Rocky Mountain Humane Investing
Hello again, I’m Brad Pappas, founder of Rocky Mountain Humane Investing, a fee-only investment advisor with clients throughout the U.S.
Don’t Believe the Hype: Investors Are Not Helpless
It’s Saturday, April 5th, and I’m really bothered by the media depicting investors as being helpless in this market crash. You do have alternatives. I can imagine that if you’re new to us, you might be thinking that we’re just about social issues.
A Strategic, Data-Driven Investment Process
We also have a data-driven strategic process as well. It’s been a constant goal of mine to improve our investment process. To use a football analogy, we play both offense and defense for client accounts.
Why Preservation Matters in a Bear Market
Our goal is to do well in a bull market and then go into a preservation mode in bear markets. As of April 4th, the Humane Growth Portfolio, which is the model for our clients, is down just 1.7%. Preservation is critical if you want to keep the profits made in a bull market. For many, the returns made in 2024 have already been evaporated.
Why Retail Investors Can’t Copy Warren Buffett
In my view, the retail investor is being told by the majority of advisors to act like a Warren Buffett. But the average retail investor is not like Mr. Buffett at all. We’re not billionaires, and he does not rely on a Berkshire Hathaway 401(k) plan for retirement.
A 40% market decline will affect your retirement standard of living. Plus, after a 40% decline, you’ll need a 68% return to reach your high watermark again, and that could take many years. But your account statement does not have to be an obituary of the life you hope to live in retirement.
Talk to a Strategic Investment Advisor
So if you talk to your advisor and you don’t feel you’re receiving enough strategic help, you might want to give us a call. If you did, these are some of the facts we would discuss with you. We only focus on long-term trends, which are defined by years—not days or months.
Spotting Market Shifts Early in 2024
We identified a probable change in trend in January, and especially in February of this year. Our clients are heavily invested in cash and treasuries. Speaking for my clients, I don’t want to give the profits back from previous years.
What You Need to Know About Bear Markets
Here are some facts about bear markets: They’re rarely quick events, and patience is critical. Lots of pundits will declare that the market has bottomed, but we only know in hindsight, and we don’t make those silly kinds of projections.
The average bear market lasts nine months. Since 2000, we’ve had two bear markets that have lasted much longer. The peak to trough in 2000 to 2002 was a loss of 49%. The peak to trough in 2007 to 2009 was a loss of 56%.
For perspective, as of April 4th, we’re only in month three of the decline. If we enter a recession, which seems increasingly likely, we’ll probably decline further.
Are You Gambling on a Quick Recovery?
Now do you really want to gamble that this bear market will not be like 2002 or 2008? If you’re wrong, your account will be decimated. It’ll take many years to recover—if you’re successful. Many investors quit at this point.
Protecting IRA Portfolios Without the Tax Burden
If your investment portfolio is an IRA, it’s an easy decision since taxes are ignored. We do our best to protect our client assets, but it can never be considered a guarantee. Our systems are not designed to get you out at the absolute top, nor buy in at the absolute bottom.
How to Get in Touch
If you’re ready to schedule a meeting, you can call us at 970-222-2592 or send an email to brad@greeninvestment.com. Thank you.