The below visual is a great illustration of how many perceived market “crises” and headline-important events occur over a relatively short time period. We are constantly inundated by news headlines that foretell disaster and calamities, all intended to strike the fear chord thereby attracting more viewers/readers/listeners; good news and positive information unfortunately just doesn’t sell. So many of these instances over the last decade were at the forefront of focus for many nervous investors at the time, now most/if not all of them are simply past occurrences that have little relevance to the now. To the steadfast investor whom did not react emotionally, they were little more than a “blip” in economic history.
The blue graph is the S&P 500 Index between January 1, 2008 and December 31, 2018, serving as a generalized view of the US stock market during that time. Clearly there is a very real disconnect between the equity investment markets (which is largely based on corporate earnings and macroeconomic fundamentals) and the constant aberrations of the truth spun by the media.
So, when you read a negative headline, one that produces its intended outcome (fear), keep this chart in mind and stay the course! Those that gave into their emotions during one of the most challenging times in the past decade (the Great Recession), or any major market downturn in history for that matter, still must live with the very real and lasting ramifications of that mistake. As always, we are here to continually be a voice of objective reason amongst all the noise, to help guide you in that complex emotional battle, whatever the next headline may be.
We’ll leave you with an interesting quote by Daniel Kahneman “Nothing in life is quite as important as you think it is while you’re thinking about it.”
Joel Malick currently maintains the Accredited Investment Fiduciary (AIF®) and Accredited Wealth Management Advisor (AWMA®) designations. Joel and his team at Strategic Financial Partners recognize that running this race for the long term is one of the greatest challenges you’ll face in your lifetime. Thus, they combine critical planning and investment strategies with real-life perspectives. Their consultation is provided at no additional cost to 403(b) Alliance Retirement Plan participants.