Down markets have met their match

Read time: 2 to 4 minutes

Challenging markets can test the patience of even the most disciplined investor. You may be tempted to wait out a market downturn from the sidelines. But history has shown us that bailing on your long-term plan may not be the best strategy for your money.


 

If you're feeling uncertain about the markets and your strategy, consider expert advice from Vanguard. We get to know you and your goals when you sign up. Then we give you a diversified financial plan that takes into account 10,000 market scenarios to keep you on track to reach those goals.

Advice from Vanguard can help you through turbulent times

Here are 3 ways Vanguard advice helps you keep a disciplined approach of investing for the long term—no matter what the markets are doing.
1. We encourage you to keep a long-term perspective
Down markets aren’t new to Vanguard—we’ve been here before. And we’ve also been through the market rallies that followed.
The fact that any type of investment has done well in the past doesn’t mean it will do well in the future. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.
Everyone reacts to market ups and downs differently. That's exactly why, when you sign up for advice, we get to know you before building your personalized financial plan.
2. We monitor the markets to help you stay balanced
The mix of investments in your financial plan is designed to weather market conditions. It can be tempting to sell your investments when markets are tough. But if you do, you’re taking a risk—a very big risk—that you’ll miss out when markets bounce back. We check your account typically each business day, and rebalance it as needed to keep you on track.

The chart below uses the down markets of 2020—when COVID hit—to show why it can be unwise to time the market by moving to cash:

Growth of a 60/40 asset allocation from January 1, 2020—December 31, 2020

The fact that any type of investment has done well in the past doesn’t mean it will do well in the future. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.

The hypothetical 60% stock portion is represented by the S&P 500 index, the 40% bond portion is represented by the Bloomberg US Aggregate Bond Index, and the cash portion is represented by the Bloomberg US Short Treasury 3–6 month daily return from January 1, 2020, to December 31, 2020.
Source: Vanguard calculations, using data from Morningstar.
3. Together, we stay the course

A lot can happen over 20 years. Sticking to your plan is a core belief at Vanguard. And we built our advice engine with this perspective in mind.

If you get out of the market when prices are falling, you might miss out on a recovery. No one knows when a recovery will start or how long it will take for the market to bounce back. Leaving the market—even for a few days—can make it harder to reach a long-term goal like retirement. This chart shows the potential value of staying the course:

Hypothetical returns from January 1, 2002—December 31, 2021

The fact that any type of investment has done well in the past doesn’t mean it will do well in the future. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.

For the 60% stock/40% bond portfolio, stocks are represented by the S&P 500 index and bonds are represented by the Bloomberg US Aggregate Bond Index from January 1, 2002, to December 31, 2021.
Source: Vanguard calculations, using data from Morningstar.

Be confident about your financial future

When you sign up for a Vanguard advice service, you get:

  • A personalized financial plan to help you reach your goals.
  • Ongoing investment management to help keep you on track no matter what the markets do.
  • Low costs, so more money stays invested in your account.
  • Tools and resources to help you take charge of all your finances.

Whether you want us to manage your money, or you just have a question for an advisor, we’ve got you covered. Vanguard's advice can help you live on your terms, today and in retirement.

So join the thousands of investors who use our advice—and be prepared for all market conditions.

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1 Actual costs vary. Digital Advisor will reduce your gross advisory fee by the amount of revenue (such as expense ratio rebates) that Vanguard (or a Vanguard affiliate) collects on your portfolio in order to calculate the net advisory fee. Digital Advisor’s annual net advisory fee is approximately 0.15% across your enrolled accounts for a typical investment portfolio, although your actual net fee will vary depending on the specific holdings in each enrolled account. Your net advisory fee can also vary by enrolled account type. Plan participants’ actual advisory fees will vary depending on your plan’s lineup and the revenue that Vanguard receives from those investments. Please see your plan fee disclosure notices for the applicable annual gross advisory fees that apply to your plan assets. 

2 To be eligible for Vanguard Digital Advisor, you must have either:

  • $5 or more in your employer-sponsored retirement plan at Vanguard.
  • $100 or more in IRAs and taxable accounts—owned individually or as joint tenants with rights of survivorship—at Vanguard.

3 Actual costs vary. Personal Advisor will reduce your gross advisory fee by the amount of revenue (such as expense ratio rebates) that Vanguard (or a Vanguard affiliate) collects on your portfolio in order to calculate the net advisory fee. Personal Advisor’s annual net advisory fee is approximately 0.30% across your enrolled accounts for a typical investment portfolio, although your actual net fee will vary depending on the specific holdings in each enrolled account. Your net advisory fee can also vary by enrolled account type. Plan participants’ actual advisory fees will vary depending on your plan’s lineup and the revenue that Vanguard receives from those investments. Please see your plan fee disclosure notices for the applicable annual gross advisory fees that apply to your plan assets.

4 To be eligible for Personal Advisor, you must have one of the following:

  • $250,000 or more in your employer-sponsored retirement plan at Vanguard.
  • $50,000 or more in IRAs and taxable accounts—owned individually or as joint tenants with rights of survivorship—at Vanguard.
  • $250,000 total among your employer-sponsored retirement plan, IRAs, and taxable accounts—owned individually or as joint tenants with rights of survivorship—at Vanguard.

Vanguard Digital Advisor's and Vanguard Personal Advisor’s services are provided solely by Vanguard Advisers, Inc. (VAI), a registered investment advisor. Please review the Vanguard Digital Advisor and Personal Advisor brochure  for important details about these services. Vanguard Digital Advisor’s and Personal Advisor's financial planning tools provide projections and goal forecasts, which are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. VAI is a subsidiary of The Vanguard Group, Inc. (VGI), and an affiliate of Vanguard Marketing Corporation (VMC). Neither VAI nor its affiliates guarantee profits or protection from losses.