Current Stock Market Volatility – August 2019

Jeremy Morris • September 16, 2019

Last September we witnessed the U.S. stock market jump to new all-time highs briefly, before beginning a three-month regression that ended with stocks dropping 20% by Christmas Eve. The television and news outlets had a three-month period where they threw flashing red (and bold) words on the screen so that you panicked and second-guessed everything your financial advisor had told you about buying stocks and holding onto them through uncomfortable volatility.

If you were a client with Five Pine Wealth during this period, you would have held tight and seen this instability as a great buying opportunity. For those of you contributing to your investment accounts each month, you were buying stocks at a discount (e.g. instead of paying $100 per share, you paid $80 per share – what a deal!). For most everyone else, your stock dividends and distributions were reinvested to purchase more shares at a nice discount.

This summer we’ve experienced the stock market again at new all-time highs. Aren’t you glad you didn’t sell off everything on Christmas Eve like the T.V. told you to do?

The stock market recovered completely just months after the December 2018 chaos, but now again we are seeing increasing volatility and similar concerns over trade wars, the “health” of the global economy, and a recession that has to hit us sooner rather than later. The result from these issues: the stock market will drop like it does in every correction and recession, and your stocks will drop in value just as they have done historically every 5 to 7 years.

Why should you NOT care?

In August 1979, now 40 years ago, Business Week ran a now-famous cover essay, “The Death of Equities”. The article explained that putting your money into the U.S. stock market was no longer a great idea. The article argued that institutions no longer wanted stocks, they wanted hard assets like real estate, gold, and art. They claimed the average person was no longer interested in investing because rising inflating “killed” stocks, and for a short period of time, stocks had trouble outperforming high inflation. Additionally, U.S. tax laws were said to be unfavorable for growing U.S. businesses, so international stocks would be a more sensible place to invest.[1]

Fast-forward to today: since 1960, inflation (consumer price index) is up 9 times[2], the S&P 500 index is up 50 times[3], and S&P 500 cash dividends are up 28 times[4]. In fact, since 1979 the stock market has an average compounded annual growth rate (CAGR) of 11.56% annually. In other words, $1 dollar invested grew to $79.53.[5] It looks like Business Week was completely inaccurate with their assumption.

Let’s go back to volatility and the stock market dropping. In the worst recession of our lifetimes (2008-2009), the market dropped by almost half, or 50%, but if you stayed the course and didn’t pull your money out, you could have more than doubled it today, just 10 years later. In fact, if you bought an S&P 500 index near the bottom of the recession, you could have more than tripled your money today.

Yes, the stock market will drop, and yes, your stocks will drop with the market. This is normal; markets do this from time to time.

If you’re worried about what you see, then turn off the news and ignore the headlines – they’re temporary, just day-to-day. And remember, if you believe all the hype around you, then panic and sell everything, you’ll really be kicking yourself in the butt when stocks recover and once again the market hits new all-time highs down the road.

More importantly, if you’re a client of ours, then you know to hold steady for the many reasons listed here in this article. Additionally, you’re diversified into hundreds (if not thousands) of stocks, and also likely diversified in gold, institutional real estate, private equity, and another asset classes that all have a place within your portfolio through the ups and downs of this unpredictable market.

Disclosures

Securities and advisory services offered through Centaurus Financial, Inc. Member FINRA & SIPC, Registered Broker Dealer and a Registered Investment Advisor. Centaurus Financial Inc. and Five Pine Wealth Management are not affiliated. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and client suitability has been reviewed and determined. Information relating to securities is intended for use by individuals residing in (OR, OH, ID, CA, WA, MT, UT, NY). Centaurus Financial Inc. does not provide tax or legal advice.

Citations: [1] www.ritholtz.com/1979/08/the-death-of-equities [2] www.usinflationcalculator.com [3] www.pages.stern.nyu.edu [4] www.multpl.com [5] www.moneychimp.com (calculation from Jan. 1979 to Dec. 2018)

Join Our Newsletter


Plan smarter with our monthly financial tips + insights

How Much Can You Spend on Travel and Giving in Retirement?

September 17, 2026
Key Takeaways Having substantial wealth doesn’t automatically translate into a clear strategy for spending on travel, family, and philanthropy. A tax-aware withdrawal strategy determines how much you can direct toward discretionary spending and gifts each year without disrupting your plan. You can remove the guesswork by giving travel, family gifts, and charitable giving their own funding strategy through tools like donor-advised funds, QCDs, and structured gifting. A written, stress-tested income and withdrawal plan is how you get numbers you can act on with confidence. They call it your “golden years” for a reason. It’s the long stretch you’ve dreamt of for years: leisurely trips with your spouse, helping your kids with a down payment, and finally writing that big check for a cause you’re passionate about. You built significant wealth and have the resources and the desire to do all three. But even with a substantial portfolio, many high-net-worth retirees hesitate before spending freely — even on the things that matter most to them. Even with substantial assets, they find themselves asking, “How much can I spend in retirement? That hesitation usually has to do with the absence of a coordinated strategy that spells out how much you can direct toward discretionary spending each year and how those decisions affect your tax obligations, estate plans, and financial flexibility. Shifting From Building Wealth to Directing It  For most of your career, your financial discipline revolved around growing your portfolio: maximizing contributions, managing risk, and watching the number climb. That habit served you well, but retirement introduces a shift in decision-making. Instead of allocating income toward growth, you’re directing that accumulated wealth toward your lifestyle, your family’s future, and the causes you care about. Once you retire, your measure of success changes from the size of your balance to whether your withdrawal strategy can fund your priorities and legacy goals without unnecessary tax drag or risk.

Could a Roth Conversion Raise Your Medicare Bill? What the IRMAA Rules Say

August 19, 2026
Key Takeaways Medicare surcharges (IRMAA) are based on your income from two years earlier, so a decision you make today can raise your premiums well after you've forgotten about it. A large IRA withdrawal, a Roth conversion, or selling appreciated assets can all push your income over the IRMAA thresholds, even if the bump is temporary. IRMAA works on a cliff system: crossing a threshold by even a small amount triggers the full surcharge for that tier, not a gradual increase. You open the mailbox, and there's a letter from Medicare. Your Part B premium is going up, and not just by the usual few dollars. For retirees who saved diligently and built a solid portfolio, it can feel less like a routine adjustment and more like a penalty for doing everything right. That letter is almost always about IRMAA, the Income-Related Monthly Adjustment Amount. It's one of the more confusing parts of retirement income planning, because the decision behind it could have been made two years earlier, and by the time the bill shows up, most people have already forgotten what caused it.