“Art enables us to find ourselves and lose ourselves at the same time.”
– Thomas Merton
Nor should it be yours.
It’s interesting when the stock markets go down. It bothers us. It generates a lot of emotion, predominately probably fear, worry and the like. It’s also interesting that the news too often exacerbates all this with headlines and talking heads telling us the sky is falling. Studies have shown that investors are bothered twice as much with declines as they are “happy” with gains.
As I fester a bit on behalf of the well-being of my clients when markets react like this - probably because I see the markets all day, 5 days a week - what I find personally interesting is that when I go outside the office I see people, normal people, people of all walks of life, talking about something other than the stock market. It’s as if they don’t even know what’s going on. It shouts at me that people are talking about their upcoming vacation, the movie they just saw, where they’re going to eat that night, their kids, graduation, whether to buy and EV or not, the weather and the like. No one is talking about the stock market. Because …?
Because the stock market is not their life. There is so much more to life than the stock market and thankfully so.
Investing is an interesting thing. Generally, given time, investing in stocks and bonds is a great way to build wealth. Short-term, not so much, which is why during our conversations with clients and prospective clients, we always ask, “What’s your time horizon for this money?” If it’s under three years (at least, better five to 10), we suggest cash or CDs but not stocks and bonds. If it’s 10 to 20 years or more, then okay, because the number one priority when it comes to investing is stocks and bonds is staying power. Can you leave your money alone when storms come along, at least to some degree?
People can say “yes, of course,” but they really don’t know. They don’t know emotionally, none of us really do. Because when the news screams at you that the sky is falling, it takes a clear and present strength and maturity so say, “No, it is not, this too will pass, I’m good, let’s go to lunch and plan our next vacation.”
At a recent Investment & Wealth Institute conference, Liz Ann Sonders, Chief Investment Officer for Schwab, rightly stated, “Trying to time the market with any kind of precision is a fool’s errand.” She further noted that when the news asks, “Is this a good time to get in?” or “Is this a good time to get out?” (of stocks) that this is not about investing. No, it is not investing. It’s about guessing, it’s about lottery, it’s about luck and one can end up buying high and selling low as opposed to investing for one’s financial future.
Look, no one rings a bell at the top and no one rings a bell at the bottom. But the noise and chaos in between can be maddening.
I remember a bumper sticker I saw that stated, “TV - the more you watch the less you know. Kill your TV.”
Perhaps?
It can be like the story of Odysseus. In a scene from the ancient Greek epic, the Odyssey, in which the Sirens attempt to use their enchanting song to lure the titular hero, Odysseus, and his crew towards deadly waters. But Odysseus' crew had blocked their ears with wax to protect themselves from hearing the Sirens' singing so they could keep on rowing to safety. But Odysseus, wanting to hear the Sirens, ordered his crew to tie him to the mast so that he would be able to hear the Sirens and their temptations without risking himself, his crew or his ship to ruin.
Okay, a bit melodramatic, but sometimes it seems like this is good advice – cover your ears.
I guess the bottom line of all this is it’s not pretty, it never is, but this too will pass. As Ms. Sonders noted later in her talk, “There’s not better country than ours with companies, innovative spirits, creativity. Nothing will squash that; it’s a beacon of long-term optimism even as we navigate the natural short-term cycles.” This is like the old saying by Warren Buffett, “Never bet against America.” She reminded us of a statement Charles Schwab made years ago: “Investing, by its nature, is an act of optimism.”
At this same conference, retired General Stanley McChrystal stated, “Risk is about resilience.”
And the Apostle Paul said, “… know that suffering produces endurance, and endurance produces character, and character produces hope, and hope does not disappoint.”
Bless you all. We are always here for you – rain or shine.
David Neunuebel
CFP®, ChFC®, CLU®, CIMA®, ADPA®
Senior Vice President, Investments
Opinions expressed are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. Investing involves risk and investors may incur a profit or a loss regardless of strategy selected.