The markets are getting pummeled today (01/24/22). It’s not fun to watch or experience.
If you’re a client, my goal when I address these situations, is to always be honest, never just try to make you feel good by sugar coating something, and be as unbiased as I can. At the same time, I believe in what I do, I believe in the long term viabilities of the investment markets, and I believe I have enough expertise to have you in a portfolio that accurately represents you and is in your long term best interest.
So while I’m biased as far as my beliefs are concerned, I also know I need to be straight forward with you, no matter what my natural tendencies are, because you deserve it, it’s the right thing to do, I know some of you are concerned, and my belief system, and being straight forward with you are not incompatible.
I’m telling you all this because today’s a crappy day in the markets. And it’s concerning to you as an investor.
However, as a professional, I know these moments are temporary. So are the good moments, by the way. They’re all temporary. We’ve just been having more good moments than normal over the last 19 years or so. So maybe that’s the new normal. But either way, after we got finished with the technology bubble bursting, the Enron scandal and the Tyco scandal back in 2003, except for the Real estate bubble in 2008, a couple smaller hiccups, and some gyrations from the Pandemic, there’s been a lot of clear sailing. But that’s not normal. Nice, but not normal.
Today isn’t normal either. The ups and downs are all temporary. The only real constant, so far, is the overall trend of growth throughout our entire history. Sometimes slower, sometimes faster, but over the long term, including all the ups and downs, there’s been growth.
I truly believe that’s what today is a small part of… an overall trend of growth. It’s just hard to see the forest because at the moment, we have this huge tree hitting us in the face.
People are nervous about inflation, people are nervous about Russia and China, and when folks get nervous in regards to their investments, some run. Maybe they gravitate towards larger more stable companies, maybe they move more into bonds or real estate, or maybe they just cash out altogether. Either way, they move their monies, and that’s what makes the markets roil. Not Russia, not China, and not necessarily inflation, although that can have an effect eventually. Inflation is having an effect currently, but not all in one day. What you see today is fear. That’s what’s causing the markets to roil today. Simple fear.
Think about some of the areas you have your investments in. Do you see those industries going out of business? Or do you see crazy happening for a while, and then things eventually returning to whatever normal seems to be?
I see the latter. I see a real rough patch. I already saw inflation well before it reared it’s ugly tall head, and made those adjustments in early 2020. And while incremental adjustments have been made since, what I didn’t see was the Pandemic. But even the pandemic itself didn't necessarily hurt the markets directly. Sure, it caused a lot of volatility early on, but what it really did was to create material shortages. It disrupted the supply chain. It resulted in employment disruption. Those manifestations have hurt the investment markets, but the pandemic itself didn't directly hurt the markets. So now we're dealing with all these other manifestations. And people are frightened. And it is their fear that is causing the markets to move like they are currently moving.
Having said all that, as I said previously, I believe all of this is temporary. There will be a time, probably in the near future, that we come out on the other side of this and the markets turn back upwards. This is temporary. For those of you who aren’t taking withdrawals, count your shares. Your values are moving down at the moment and will eventually move back up. But your shares are your shares, and no one is taking them away from you. You still own the same number of shares you had in the middle of last year… or more.
In the meantime, I am paying attention to your portfolio. I am contemplating adjustments. But I am not contemplating a wholesale evacuation. That would lock in your losses, and I am not going to do that. We may move a little bit towards something I feel would be more in your best interest, but incrementally.
Take a deep breath, and if you have any questions, or if your concerns are really starting to rise, please call or write. I am here to talk with you about those concerns.