“In the depth of winter, I finally learned that within me there lay an invincible summer.”

— Albert Camus

 

Markets, Volatility, and the Discipline of Remaining Invested

 

As we begin a new year, we want to take a moment to reflect on the one just passed. We were thankful that 2025 delivered another solid year of market performance, despite no shortage of economic, political, and geopolitical uncertainty along the way. As always, markets reminded us that progress is rarely linear - but patience and discipline continue to be rewarded over time.

 

We also hope that you were able to enjoy some well-earned downtime over the holidays, spending time with family, friends, and loved ones. With the new year underway, it’s a natural time to reset, revisit long-term goals, and consider how best to position portfolios for the years ahead

 

Equity Markets at Record Highs: Navigating Common Questions

 

As we draft this newsletter, the equity markets continue to make headlines. In 2025, the S&P 500, Nasdaq Composite, and S&P/TSX Composite each reached multiple all-time highs, extending a strong multi-year advance. Periods like these naturally prompt thoughtful questions from clients - particularly those holding cash or reviewing portfolio positioning.

 

Is this the right time to invest? Should we wait for a pullback? If markets have done well, should we step aside and re-enter later?

 

These are reasonable questions. They are also recurring ones. And they point directly to a set of enduring investment principles articulated by Nick Murray, a long-time advisor and published author who has spent five decades studying how markets behave - and how investors respond to them. Recently, we were fortunate to hear Nick reflect on these ideas during a Fireside Chat, reinforcing why they remain so relevant today.

 

Nick Murray’s work and philosophy can be explored through your favourite book retailer or further at (nickmurraynewsletters.com)

 

Nick Murray’s Three Immutable Truths of Investing

 

Drawing on more than a century of U.S. market history, Murray often distills market behavior into three simple truths.

 

Truth #1: Stock market declines are not rare events. Historically, investors should expect a decline of roughly 15% peak-to-trough at least once each year, often followed by a recovery within the same 12-month period. These pullbacks are uncomfortable, but they are normal and expected.

 

Truth #2: More significant drawdowns occur periodically. Approximately every five years, markets have experienced declines of 30–35%. Some were less severe but in a few instances, they were greater. These episodes can take longer to recover from - often 9 to 18 months - but history shows they have been temporary interruptions rather than permanent setbacks for long-term investors.

 

Truth #3: Despite these recurring declines, long-term equity investors have earned approximately 10% compound annual returns over extended periods - but only if they stay invested. That final condition is critical. The return does not come from avoiding volatility, but from enduring it.

 

Why Remaining Invested Is Challenging — and Essential

 

The greatest threat to long-term compounding is not market volatility itself, but the human response to it. Periods of economic uncertainty, geopolitical tension, or sharp market declines trigger a powerful instinct to seek safety. Acting on that instinct often leads investors to exit markets after losses and return only once confidence has been restored - typically at higher prices.

 

Because no one can reliably predict when declines will occur or when recoveries will begin, attempts to time these moves frequently result in the interrupting of the compounding process that drives long-term wealth creation.

 

History shows that long-term success belongs to investors who remain committed to a well-structured plan through both advances and declines. Staying the course is not passive – it requires perspective, discipline, and guidance. When compounding is allowed to work uninterrupted, it remains one of the most powerful forces in long-term wealth creation.

 

At the Moore & Miller Investment Group, we strongly believe that time in the market matters more than timing the market.

 

Our focus remains on providing steady perspective and disciplined guidance, particularly when markets test conviction.

 

Warm regards,

 

Moore-Miller Investment Group