Lately I have been amusing myself by looking back into my radio show archives, with the intention to see how times have changed. Not knowing an answer prior to researching a question is mentally stimulating. This next paragraph was written (by me) nearly 2 years ago:
September 11, 2016, 6:30 A.M. It was 15 years ago the world as we knew it changed forever. At least I wish it were forever. I remember where I was, and if you are old enough to be listening to this show, I’ll pretty much guarantee that you do, too.
What did we learn from this, and what should we learn from the time since? Remembering that the Dow-Jones Industrial Average (DJIA) is currently above 25,000, let’s look back and see:
- On 9/10/2001 the DJIA closed at 9,605
- That was the last number recorded that week, as the market failed to open the next day, and for another week thereafter
- When it did open, the DJIA fell to 8,920, for a drop of over 7%
- On December 19, 2001, a mere 99 days later, the DJIA crossed the 10,000 mark, up about 12% from the Post-9/11 low mark
- A year later, the DJIA was back down to approximately crisis level
- For the next 4 years, the index was higher every 9/11 than the year before
- Then came the 2007 financial crisis, and the DJIA dipped all the way down to the mid-6,000s
- In March of 2009 the index started to recover
- Now, we are up over 150% from there, despite the recent correction (remember, this was written in 2016)
That was less than 2 years ago, and look at the market now! The point I am trying to make is easy; stay in the market for the long haul, and you should be fine. However, following that advice is not necessarily as easy as giving that advice, though history shows this to be true. Reacting to short-term events has never been profitable in the long run. Based on history, our capitalistic system fosters a strong and growing economy.
Today, with the DJIA having crossed over the 25,000 mark once again, we are still below the market high of early 2018, but those highs seem to be once again in sight. Faring even better is the NASDAQ, which is currently reaching new highs. Yet, if you pay attention to the various news media, you might think that our country is in a world of hurt.
Back in 2009, I did a radio piece entitled, “Consider the Source.” Things you hear are sourced by people who have varied agendas. Some are pushing a political point of view, others are selling newsletters, and still others may be hawking annuities. These people often use Fear and Greed to drive short-term news cycles, but the markets are affected in the long-term by economics.
Getting a dose of unbiased news through our radio show each and every week can help stabilize the urges we sometimes get to react to fear and greed. Investing with consistency and rational observations of what is going on in the economy has always paid dividends. It was true then, and it remains true today.
Listen to the Van Wie Financial Hour every Saturday morning at 10 AM on WBOB in the Jacksonville market, or through your computer or mobile device on TuneIn Radio.
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