Market Perspective

The stock market has been sputtering over the past eight months, but I’m not worried—here’s why. Over the past 16 years, many national and global issues have caused bumps in the stock market. Do you remember the swine flu from 2009? Or the European debt crisis of 2012 and how there was weekly news that Greece would tank the European economy? Or the 2014 Russian economic crisis? Or the European immigration and debt crisis of 2015? Or the Chinese stock crash in 2015? Or the pre-COVID souring of the economy? When you look back at historic runs in the stock market, it’s easy to forget about the many bumps that took place along the way. In 2008, the S&P 500 stock index dropped to 735 (a ±50% drop from its previous highs) in the wake of a national debt crisis. After that, the market went on a run all the up to 4,800 last December—that’s a 550% increase! As I write this, it’s hard to believe how much the index has increased in 16 years despite all the global and national crises that took place. The truth is that stock market investing will never be smooth—there will always be bumps with hills and valleys as it grows. In August, the S&P 500 stock index dropped by 141 points (3.37%) to 4,057 on news that the Fed is increasing interest rates until inflation halts. As a side note, this time will likely be referred to as the great inflation crisis of 2021-2023. Even with today’s drop in the market and the fact that the market is down 15% from its all-time highs, I still believe in a long-term investment strategy where you hold onto the best investments. America’s best days still lie ahead. Our corporations’ best days still lie ahead. There are technologies that haven’t yet been invented that with change everything we do. While it may seem counterintuitive, the key to maintaining a level head and long-term focus when the market is sour is to (1) not watch the news too much and (2) don’t look at your stock statements too much. And, most importantly, call me if you feel like you’re freaking out! Happy investing! Ü