Markets like this one can test your resolve as a long-term, disciplined investor. Watching/consuming too much of the news each day is likely counterproductive (both for your mental/emotional health and your finances). The constant news cycle tends to heighten our emotional reaction to what is going on in the world.
As investors, there are always reasons to be cautious and reasons to be optimistic—often simultaneously. The bears and the bulls both have valid points. But to be a successful investor over multiple decades, it pays to remain optimistic.
We also must admit as advisors that we can’t predict the future – but we can help you stay the course. We certainly can’t time the future, which means we can’t know the best time to trade out of and back into the stock market. We continue to buy and hold high-quality companies that generate (and grow) earnings and free cash flow over time.
- Bad things:
- Inflation is brutal. It attacks every American family.
- Hopefully, it has started leveling off, but we don’t know.
- Recession: yes, we are likely in a recession, though we never know until after the fact due to how it is calculated and reported.
- This is not a new thing. We go into recessions periodically, to differing degrees.
- Historically, the economy rebounds to greater levels of output.
- Confusion: It is amazing to see the headlines/news stories that seem to gather attention.
- Most of these cause distractions and offer no real help to any American family.
- The bearish pundits have [mostly] been bearish for many, many years – were these folks ever bullish in the past?
- Inflation is brutal. It attacks every American family.
- Good things:
- The companies that make up the stock market have always rebounded to new highs.
- The painful part is that we must experience the low to capture the future highs.
- Innovation continues. New products and services are being refined by scientists, engineers, entrepreneurs, and countless others every day.
- Bear markets [eventually] author bull markets. Instead of focusing on the pain of seeing your portfolio value decline right now, think about being fully invested for the inevitable rebound.
- What are great investors doing right now? Buying the dip or panic-selling?
- Is there any other nation on earth where you would rather be? .
- The companies that make up the stock market have always rebounded to new highs.
Via Stratfor:
“The American geography is an impressive one. The Greater Mississippi Basin together with the Intracoastal Waterway has more kilometers of navigable internal waterways than the rest of the world combined.
The American Midwest is both overlaid by this waterway and is the world’s largest contiguous piece of farmland. The U.S. Atlantic Coast possesses more major ports than the rest of the Western Hemisphere combined. Two vast oceans insulated the United States from Asian and European powers, deserts separate the United States from Mexico to the south, while lakes and forests separate the population centers in Canada from those in the United States. The United States has capital, food surpluses and physical insulation in excess of every other country in the world by an exceedingly large margin.”
Our team is always here to talk with you! We don’t want anyone to bottle things up without talking to us. Even if we all know the “right” thing to do is stay invested, that doesn’t make it easy. We are here to help in any way we can.
