It has been an interesting couple of weeks in the market. As usual, I am very disappointed and maybe even embarrassed at the way the so called “expert” financial news anchors handled the more “volatile” days. I did not watch TV, but I heard stories of talking heads who were foaming at the mouth, and I saw the headlines using words like “crushed”, “bloodbath”, and other scary words to try to get me to read the article. This is the kind of noise and fearmongering that might lead a prudent investor, say a Cascade client, who has planned wisely, invested confidently, and is enjoying life, to make mistakes. Let’s think about the word “volatile” that the press likes to toss around on negative days. A year ago, when the Dow Jones Industrial average went from 16,000 in mid October to 18,000 by early December*, it was not volatile, it was a Santa Claus rally! Nothing scary about a 12% increase, just smooth sailing. But 12% down, now that is volatile! But, from my personal perspective, I have good news.
I am happy to report that I did not receive a single call from a client asking me if we should SELL, SELL, SELL! In fact, the few calls I did receive were asking me if this was a good time to buy. That question, along with conversations I have had with fellow Cascade advisors, reminded me of one of my favorite marketing pieces that I first saw back in the late 1980’s. So, to answer the question, “when is a good time to invest”, I give you Louie the Loser.
My point here is not to try to get you to purchase American Funds Investment Company of America. It is to reinforce one of the oldest sayings in successful investing. It is not timing the market, but time in the market that will help you to reach your goals. Remember, poor Louie picked the worst possible days to add money for 20 straight years, including right before 9-11 and in 2008, the start of the great recession. Yet, even Louie is smiling now.
I am not turning a blind eye to a 12% drop in the markets; I do take it seriously. But this kind of “volatility” has happened before and it will happen again. My job is to work with you to help you achieve your goals. And based on the complete absence of worried phone calls, we are getting the job done.
Cooler days are almost here; I love fall in the Ozarks! Enjoy Life!
As always, I enjoy hearing your questions and feedback.