Entry – 004
I remember the 2000s like it was yesterday.
I had begun my finance obsession during the .com craze finishing school in 2001. By 2004 I was in the business. I sat across from clients who were terrified. Real people. Good people. People who’d done everything “right”—invested consistently, stayed disciplined, followed the buy-and-hold playbook their advisors had sold them.
And they were petrified & devastated during that period of time. The 2000s wasn’t the ideal buy and hold decade.
The dot-com bubble had just burst. Then came 9/11. Then the recovery that wasn’t really a recovery. Then 2008 hit, and I watched grown men and women watch their life savings get cut in half. Again. Not once. Twice in less than a decade.
Twice in ten years, the market had stolen half of everything they’d built.
The stock market went from being a path to wealth to being a four-letter word in most households. People weren’t asking “how much should I invest?” anymore. They were asking “should I invest at all?”
Fear had replaced hope.
Skepticism had replaced confidence.
And I was sitting in an office defending a philosophy that had just failed them spectacularly.
That’s when I realized something: a pure buy‑and‑hold approach can be very painful when markets don’t cooperate, especially over long stretches like that decade. And nobody gets to decide when those stretches will happen.
The Lost Decade That Nobody Wants to Talk About
Here’s what the numbers actually looked like.
From 2000 to 2009—a full decade—if you followed the buy-and-hold philosophy religiously, you got -0.95% annualized return.
Negative. Zero point nine five percent. Per year. For ten years.
Your $100,000 became $95,600. But it wasn’t a straight line down. Oh no. That would’ve been merciful. It was chaos. It was:
– 2000-2002: A 49% drawdown as the dot-com bubble evaporated
– 2003-2007: A recovery that felt real until it wasn’t
– 2008-2009: A 57% collapse as the financial system nearly imploded
Your decade of contributions. Your discipline. Your faith in “time in the market.” And you had nothing to show for it except scars and sleepless nights.
I watched clients age years in months. I watched couples have fights about whether they’d made the wrong decisions. I watched people seriously consider pulling everything out and hiding it in a savings account because at least that wouldn’t lose money. And, the amount of times I heard them say, they’d be better off hiding it under the mattress.
And when they called asking what to do, what was I supposed to tell them? Stay the course. Don’t panic. Time in the market beats timing the market.
Except it didn’t. Not that decade. Time in the market had beaten them.
What Nobody Talks About: The Other Strategy
Here’s what really haunted me then, and haunts me now: During that exact same decade, some investors using more tactical, risk‑managed approaches had very different experiences than many traditional buy‑and‑hold investors.
Not just slightly better results—fundamentally different outcomes for them in that period.
Not slightly better results. Fundamentally different outcomes.
While I was sitting across from devastated clients in 2009, there were advisors with tactical strategies who’d actually made money.
Who’d moved to cash in 2000.
Who’d bought the dip in 2003.
Who’d exited again in 2007.
Who’d caught the recovery early.
Not through luck or magic, but by trying to pay attention to what the market was actually doing instead of simply praying it would cooperate—though no approach gets every move right.
I remember thinking: If I’d known then what I know now, I might have been able to offer a very different experience to at least some of those people.
That realization didn’t leave me.
The Question That Started Everything
I couldn’t unsee it.I couldn’t go back to defending a philosophy that, in that decade, felt as if it had failed a generation of investors I was sitting across from.
So I asked myself the question that changes everything: What if I took complete responsibility for learning how to actually protect people in bad markets?
Not “What if the next market is kinder?”
Not “What if people just stay the course?”
Not “What if I accept mediocre outcomes as inevitable?”
The real question: What would it take to build an approach that’s designed to behave more defensively in difficult markets and stay on offense in better ones, instead of treating every market the same?
And I wasn’t going to guess. I wasn’t going to theorize. I was going to do the work.
Relentless, soul-grinding work!!
None of that guarantees perfect outcomes, of course, but it completely changed how I think about managing risk and opportunity.
Running backtests on decades of historical data while risking my own money testing the strategies to learn lessons that backtests and books can’t teach
– Spending thousands of hours understanding not just what works, but why it works in all market environments
For 2 decades, this consumed me. Still does.
I just can’t shake the image of those clients in 2009. Terrified. Devastated. Wondering if they’d made a terrible mistake by following the advice they’d been given.
What I Learned That Changed Everything
During the 2000–2002 crash, for example, a simple hypothetical trend‑following rule—checking whether a broad equity index was above or below its 10‑month moving average—would have signaled a reduction in equity exposure around late 2000. In other periods, rules like this can whipsaw or lag, but they show how a rules‑based approach can sometimes respond differently than pure buy‑and‑hold.
Not perfectly. You’d still take a 16% drawdown. But you’d avoid the 45% that followed. You would protect most of what you’d built. Your clients wouldn’t be terrified in 2002.
In 2008, the same approach would have moved you to defensive before the financial system imploded. You’d have sat in cash, protected, while everyone else was panic-selling at the bottom. Then you’d have caught the recovery.
Not by predicting. By responding to what was actually happening.
That’s not market timing. That’s not being clever. That’s paying attention.
And here’s the thing I realized: The people who did this weren’t smarter than my clients. They were just in a better strategy than buy and hold.
Why Buy & Hold Still Dominates (And Why That Haunts Me)
Look, I understand why buy and hold is still the default philosophy. It’s intellectually defensible. Burton Malkiel wrote a book. Jack Bogle built an empire on it. There’s peer-reviewed research showing active managers can’t beat the market after fees.
All true. All valid.
But here’s what that research hides: It’s built on long-term averages that erase the brutal decades. When you zoom out to 50 years, the 2000s become a statistical hiccup. That’s not wisdom. That’s amnesia.
The uncomfortable truth is this: Buy and hold can feel great in long bull markets and can be extremely painful in deep bear markets.
And bear markets happen. They’re not anomalies. They’re part of the cycle. If your approach depends on simply enduring every large drawdown, that’s less a strategy and more a hope.
The industry knows this. But admitting it means changing how they operate, how they’re compensated, how they justify their existence. It’s easier to just hope the next decade is better and tell clients to stay the course.
I can’t do that anymore. Not after sitting across from those clients in 2009.
When You build Something That’s based On A Crisis And you have A Solution
I know I had a solution, it was time to get to work. I didn’t start with theory. I started with a promise: I will never ask a client to endure what those clients endured in the 2000s if there’s something better I can do about it.
Here’s what that looks like in practice: Offense when it makes sense and Defense when it makes sense.
An approach that overlays a trend-following tactical layer on a core strategic allocation. It’s not complicated. It’s not magic. It’s:
- When the market is in a confirmed uptrend, we’re aggressive. We hunt the gains that build long-term wealth.
- When the trend weakens, we shift to defense. We raise cash. We move to bonds. We protect what we’ve built.
- We’re not trying to predict the market. We’re trying to respond to what the market is actually telling us.
The goal? To capture much of the upside of bull markets while seeking to reduce the impact of major bear markets. You don’t hit the peak at the very top (that’s trying to be too clever), but the aim is that you also don’t ride the whole thing down to the bottom.
Over time, the hope is to pursue a smoother path to building wealth, rather than living through the most extreme boom‑and‑bust cycles.
Most importantly: You sleep at night. Your portfolio doesn’t require prayer.
The Real Stand
I remember 2009. I remember the fear. I remember the regret. I remember the couples having fights about money because they’d lost half their retirement.
And I remember thinking: If I ever build something, it’s going to work in markets like this too.
The commitment has come forth.
It’s not built on luck. It’s not built on hoping the market cooperates. It’s built on studying what has tended to help protect wealth better in many difficult market environments, while recognizing that no approach works in every market. On understanding that offense and defense both matter. On the principle that your portfolio strategy should actually work—not just in bull markets, but in the kind of decade where people are scared to invest.
Buy and hold is simpler. It requires less thinking. Less work. Less responsibility. But it leaves you vulnerable to the kind of devastation I watched happen in the 2000s.
I’m not interested in building that anymore.
If you lived through the 2000s, you remember what it felt like. You remember the fear. You remember wondering if you’d made a mistake. You probably remember an advisor telling you to stay the course while your life savings evaporated.
If you didn’t live through it, ask someone who did. Ask them what they felt like in 2009. Ask them if they wished their advisor had actually been thinking.
If it’s to be, it’s up to you. And if you’re ready to demand a strategy that actually works in all markets, not just the ones that cooperate—we’re here.
We’ve done the work. We understand what happened in the 2000s. And we’ve built something that’s designed to manage risk differently, so you don’t have to experience markets the same way if a decade like that happens again. There will still be losses and frustrating stretches—no strategy wins in every environment—but I’d rather be intentional about how we face them.
This article reflects my personal views and experiences and is provided for general informational purposes only. It is not individualized investment, tax, or legal advice. All investing involves risk, including the possible loss of principal. The charts and examples shown are based on historical and hypothetical backtested data and do not represent actual trading or client results. Past performance, whether actual or hypothetical, does not guarantee future results, and no strategy can avoid losses or guarantee success in any market.
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