My Biggest Fear

As the ancient tale goes, the Greeks constructed this large wooden horse and told their enemy, the people of Troy, that it was an offering to their goddess Athena signifying their submission after a 10-year siege. As we all know, this was absolutely not the case. This oversized wooden horse was then led into the city gates and the soldiers hidden within this offering would eventually open those gates to their brethren and siege the city of Troy.

This term Trojan Horse has now morphed into a common expression we use to describe a hidden attack; something we naively invite in and then it seeks to destroy us from the inside out. A Trojan virus does this to our computers by disguising itself as a friendly or typical online engagement and then it secretly siphons through our mainframe scavenging for our personal information or simple destruction.

To me, this isn’t too dissimilar from how a magician seeks to distract its patrons and draw attention away from where their trick is being conducted – they call it misdirection. It’s an intentional deception. It exploits our weakness; our inability to focus on multiple items at once.

So what’s the misdirection or Trojan Horse investors are facing today?

Well, if I were to create a survey to identify investor’s current worries or gather the headlines from the major financial media, what would I find? There would be countless articles about COVID-19, the shutdowns, its effect on the economy, etc. I’d find numerous fear-driven messages about what an investor should expect from the market come election time in November. And if I continued to search even deeper, I’d probably also find some alarmists discussing hyperinflation as a result of the most recent stimulus.

These are the known “common enemies” to investors – COVID-19, the 2020 election, and fears of inflation. Yet these are not the real enemy hiding within – these stories are but the misdirection.

Let me help you out, (1) COVID-19 and how the governments and local municipalities deal with it is out of your control – we must devote our attention to what we can control (2) Markets are bipartisan; regardless of who’s in office, the great businesses of America have proven that they’ll find a way to continue being great and investors have always benefited (3) if someone is preaching to you about hyperinflation due to excessive government debt, ask them this one simple question, why haven’t we seen this hyperinflation in Japan? Challenge them to prove their thesis with historical precedence.

Again, these items are not my greatest concern for investors. I know what the Trojan Horse is for investors, I know how the enemy will be invited in to destroy their financial success.

Our greatest financial enemy is ourselves. Throughout history, investor behavior is the culprit that has dealt the most permanent financial damage.

Here’s my specific concern. We just experienced a 34% decline in markets that bottomed on March 23rd. Historically, these declines are followed by a recovery period that can feel trying and takes significant mental and emotional endurance – these recoveries typically don’t happen overnight.

Post financial crisis, the markets fought back hard over 5 years to regain the high marks of 2007. Post dot com bubble the Nasdaq spent 15 years – yes, a decade and a half – to regain its former peak. This is the reality of being an equity (stock) investor. Investors expect a “risk premium” or said another way, an elevated expected return, for their willingness to be patient and long-term focused.

In today’s culture, it seems like patience goes against everything we stand for. We are an instant gratification culture. We order our Starbucks on the mobile app to avoid lines. If we have to wait 5 minutes for our Uber driver to arrive, that’s 4 minutes too long. Long gone are the days of waiting a week to watch the next episode, instead, we prefer to binge-watch a whole season in one sitting.

For the impatience in us, those who stayed the course were nearly immediately rewarded. Following that March 23rd low, markets experienced their best 50-day rally ever. The S&P 500 rallied back nearly 38% over those 50 trading days. And because that rebound happened in a blink of an eye, one could become ill-prepared for future declines with slower recoveries.

This is the Trojan Horse that scares me. This recent market recovery experience builds an expectation for investors – it sneaks right into our psyche – that this is the way things are and we start to believe this is the way things should be. BUT let me be candid with you, this is absolutely not the norm. This is not what you should expect. If you allow this misdirection and let it become your future market expectation, then you will not be mentally and emotionally prepared to endure what markets will do and what markets have invariably done.

It’s like sending a runner to a marathon with zero training and preparation for the event. Could markets spend the next couple of years (or longer) oscillating around these same price levels? You betcha. Now, please don’t interpret this as a forecast or what my personal expectations are for markets, but rather a plea for you to expand your expectations and to avoid surprise or disappointment.

This is but one important reason why I advocate for and invest in personally, a Dividend Growth strategy because it allows me to shift my focus from the fickle behavior of stock prices and hone in on companies that are growing profits and sharing those profits – rain or shine – with shareholders. This strategy encourages good investor behavior and has built-in positive affirmations – dividends.

So, what’s your takeaway from today’s discussion?

There will always be hot topics and current events that tickle the ears of financial news patrons and most of these will just be a big distraction (a misdirection). Heed my advice, be on the defense about how you are constructing your perception of markets, what your investment expectations are, and how you are executing on your financial plan. Again, it’s poor investor behavior that has dealt the biggest blow and ruin to investors.

Perhaps this sparks some questions or maybe just some comments you’d like to share. I’d love to hear from you, please feel free to email me at

Until next week… This is TOM signing off…

The Bahnsen Group is registered with HighTower Securities, LLC, member FINRA and SIPC, and with HighTower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through HighTower Securities, LLC; advisory services are offered through HighTower Advisors, LLC.

This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.

All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.

This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates.

About the Author

Trevor Cummings

Private Wealth Advisor, Partner

Trevor is a Private Wealth Advisor focused on building customized financial plans for his and many clients of the team.

As the author of TOM [Thoughts On Money], Trevor endeavors to write and speak about financial concepts and principles in a kind of “straight” talk demeanor and posture.

He received his Bachelor’s degree in Organizational Leadership from Biola University and his MBA from California State University, Fullerton.


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