Oct 22 2014
For those of you who read these pages regularly (even somewhat), this may begin to sound like a broken record. “This is 2014 you know, Shane.” OK, your digital music with a bad track sector on the hard drive.
The issue is “What should I do with my investments? I can’t leave them as they are. I’ll get killed when the world stops turning and Hell freezes over.”
Even my family, friends and acquaintances who know my investment philosophies and strategies have been on my case lately. “Why? About what?” About everything!
Have you noticed the news? Afghanistan, Iraq, ISIS, terrorists, climate change, European economy, China’s economy, Ebola, politics (pick your own side), upcoming elections, expected stock exchange “correction”, inflation predictions, interest rate predictions, bond prices falling, race riots in the streets, police out of control, illegal immigrants, lack of border controls, immigration policies, blah, blah, blah.
Given the state of our national and world affairs, shouldn’t you be adjusting your investments to account for all the turmoil?
The media are always all over doom and gloom. That’s how they get you watch, listen, or read them. The vast majority of people go about their days in a positive situation everyday but that’s not what is presented for our viewing pleasure. So the media are biased and brainwashing in multiple ways. Stop listening to them.
No one knows the future. No one knows the effect any of these issues will have on the investment markets. Financial professionals can’t get it right yet people who spend little time or efforts in the financial world think they can out-guess the markets.
Here’s what we have; history and we know the impacts from past significant events.
The history of mankind is full of crises. The headlines we face today are no different and no worse. The history of the U.S.A. alone has faced worse events and yet here we are. Mankind perseveres.
Just back in 2008, the financial sector of our economy threatened to collapse. The stock market lost over half its value from October 2007 to March 2009! The “dot-com bubble” of March 2000 through September 2002 dropped almost 40%. Do I have to mention the Great Depression?
What about the recession of the early 1970s or the inflation of the late 1970s and early 1980s? Some of you seasoned folks remember the WIN buttons? Gasoline rationing of the early 1970s? The choking smog. The pollution. The Rust Belt. The crying American Indian commercial.
Ebola? The flu pandemic of 1918 is the deadliest in modern history. It infected an estimated 500 million people worldwide–about one-third of the planet’s population at the time. It killed an estimated 20 million to 50 million people. 25 percent of the U.S. population became sick and some 675,000 Americans died during the pandemic. It swiftly spread around the world; even the remote areas. There were no drugs or vaccines to treat the flu strain or prevent its spread.
Wars? WWI. WWII. The American Civil War. Revolutionary wars. The Cold War. Nuclear annihilation, MAD, civil defense exercises, Cuban Missile Crisis. Terrorists attacks the world over.
From the 1960s to 1980s alone, there was the assassination of a president, the attempted assassination of a president, the assassination of high ranking government official and presidential candidate, and the assassination of three civil rights leaders. In total, four U.S. presidents killed.
Life goes on.
There are always new technologies. New levels of productivity. New health breakthroughs. Better methods of food production. More wisdom. More people in countries able to rise above poverty and ignorance. The breakthrough technologies of the near future will change our world and lives like never before. Everything you know today will be different in 50 years. We will do things that are science fiction today.
Bottom line is mankind is always striving to be better than yesterday; with a few exceptions.
Here are some guarantees you can take to the bank.
- The stock market and all the other investment markets will be up and down in the short-term, however…
- It is always up in the long term—see the preceding paragraph.
- Trying to second guess news events and market movements is a losing proposition. There is plenty of investor data to back this up.
Follow the appropriate investment strategies for your objectives and forget about the fog and friction of external events. Have an investment strategy based on taking advantage of the three points listed above.
Want to know more? Start here:
- “More Boring Investment Insights for Your Retirement Account”
- “You Know This Person—the Average Investor with Self-Inflicted Wounds”
- “Before You Pull the Trigger…” (note the date on this one)