“Fear is the path to the dark side.Fear leads to anger. Anger leads to hate. Hate leads to suffering.”-Yoda
Like all disasters before now and all terrible events we have experienced prior to the onset of this current window we are living through, we will awake one day, recognizing we let our emotions take us down an unproductive path.
Our job as advisors is first to help a client recognize the larger events driving the vital pathways to each of their important financial goals. The second part of our job is to keep our client as far way from their emotions as we can during tough, scary, unsettling times. There will be more of them.
Here is the good news:
There have not been very many times in the last 30-40 years when the crowd has been more afraid of and/or concerned about what they see ahead.
The better approach?
As an investor working toward our long-term financial goals, one must focus not on the terrible events of the times pointed out below in the chart – but instead on what happened AFTER those terrible times causing the emotional distress.
…the latest on sentiment is provided below.
Read ’em and reap:
The chart above from Bespoke is a view of Yale’s Crash Confidence reading for individual investors – going back to 1999. Please note, it is a bit backwards in how it’s presented: low readings mean that a low number of investors arenotworried about a stock market crash.
The lower the reading, the higher the worries are about an upcoming market crash. Higher readings suggest an increased level of investor complacency.
..and then, here is that indication of what was next – after those previous times we felt this bad:
Notice that markets may have indeed chopped around for a bit in those circled areas – BUT, they did not go significantly lowerAFTERthose fear levels were reached.
Meaning? In each of those past times, while the negatives were swirling around us all – and being pounded into our collective psyche, a new dawn was forming.
Like in the middle of a dark night when you don’t see the sun, but it does rise in the morning. Or maybe more like a snake shedding its skin – or a butterfly escaping its cocoon.
The Continuing Theme…
Pay attention to the underlying current – not the waves.
Adapting, overcoming and making things better are all foundations of American History. Doubting it for anything more than short stints during the shocks themselves – has been a bad bet, forever.
Demogronomics©does not fade.
It may be lost in the haze of current fears – but it will remain the underlying current.
Ignore it at your peril as a long-term investor.
While tech sectors could sure use a corrective wave to spook even the small percentage of bullish investors away, I suspect setbacks will be short-lived with $18 Trillion sitting in bank accounts and 10-year bonds selling at 145 times earnings.
Yes friends – the world is changing -forever.
Every single thing will become new again.
The 80’s and 90’s were the Boomer’s Decades.
As stated for the last two years, to the point of getting boring and repetitive, the 2020’s and 2030’s are the Generation Y Decades – and the rocket-ship driving that expansion will be “everything tech” – including stuff we have not even dreamed of yet.
Imagine that – me – being repetitive? Nonsense : )