It is Friday, and so far a good week in the markets has left investors better off than we were one week ago. So why aren’t most of us feeling better? There seems to be an inordinate amount of speculation regarding the FED, Greece’s ability to remain in the EU, the likelihood of a serious market correction, ISIS on the march (internationally and domestically), and a host of other global problems and situations. How should we treat all this gloom and doom prophesizing?
One extreme would be to hastily sell out of the market and wait until the day it is enough lower to convince ourselves that it would be a prudent time to get back in. The other extreme would be to take all the news with a grain of salt and ride it out. To do nothing is often a good short-run plan, but over time we believe that it pays to be more involved.
Knowledge is power, and ignorance is bliss. I prefer knowledge. In my long list of clichés for every occasion I could include, “Those who fail to learn from history are doomed to repeat it.” Knowing the basic history of the markets and investing can provide some comfort when turbulence is causing us some discomfort.
For example, look back to 1981, when Ronald Reagan was first inaugurated. At that time the DJIA was under 1,000. Since January of 1981 we have experienced the “Crash of ’87,” the Oklahoma bombing, WACO, 9/11, the Financial Crisis of 2007 – 2009, and a host of other major events. Yet the DJIA opened today above 18,000. The global stock market reflects the vibrant economic power of the USA and many other countries. Despite the politics, taxes, wars and skirmishes, recessions, debt, etc., the market marches on in it’s volatile upward path.
Adam and I believe that historical perspective is crucial if you are an investor. The fundamental tenets of diversification, time in the market, and avoiding the worst mistakes, coupled with historical insight and statistics, will together guide us toward your financial goals.
We hope that you are listening to the Van Wie Financial Hour every Saturday on AM600 and FM100.3, and via Internet at 600wbob.com, where we have the opportunity to discuss topics of interest to investors and people with financial questions. Not all financial radio shows are created equal, as many are pre-recorded, limiting you to only subjects selected by the host. Only with a live, call-in format like ours can you discuss the topic that is on your mind right now. Be the program director by calling the show Saturday mornings between 10:00 and 11:00 at (904) 222-TALK (222-8255).
With a new calendar quarter about to start, we look forward to seeing you in the office soon. You will receive a reminder postcard in early July. Meanwhile, you can visit our website at vanwiefinancial.com to link to past radio topics, schedule a meeting, and learn more about our fee-only services.