“Nothing is ever as good or as bad as it seems” - Scott Galloway, The Algebra of Happiness
Throughout US financial history, there have been countless episodes of recessions, bank runs and panics, as well as booms, never ending bull markets and outright euphoria. At the depths of the bad times, there is an abundance of negativity that makes us feel like the market will never recover. In good times, overwhelming excitement and optimism can convince us that the market can never go down. During the last three years we have experienced both, and the emotional rollercoaster can take its toll over time.
After studying history, a clear lesson emerges: Nothing is ever as good or as bad as it seems.
In 2009, there were articles written in major publications on how the world would carve up the United States following the inevitable meltdown of our financial system. China would stake its claim on the west coast, Russia would take over Alaska, and Europe would assume the east coast. Obviously, this never happened.
At the onset of the pandemic, economists were forecasting a decade of financial destruction. To date, nearly 7 million people died from Covid, and global trade was essentially halted for 6-9 months. Given these facts, a rational observer was not likely to predict we would have one of the quickest recoveries in history, to be followed by another year of growth. Yet it happened.
During the early 2000’s internet boom, no price was too high for stocks that had a “.com” in their name. The boom started in 1998, and lasted 2 years until its peak in March 2000. The unwinding took three years, and at the bottom, a common belief was that the internet was a fad and would fade away.
Before the dot com bubble, there was the Nifty Fifty in the 1970’s. These stocks were widely regarded as long term buy and hold growth stocks, and (for their time) went viral. Their popularity fueled a boom in the market from 1970-72, and their downfall led to the market crash of 1973-74.
Taking us back to today, we are in a time of uncertainty, especially with areas of the financial sector and geopolitics. This recent string of bad news, after more than a year of declining markets, can make any long-term investor start to question things. We are likely not out of the woods yet, however at the same time, history has shown repeatedly that things are likely not as bad as they seem. Now more than ever, we need to remain focused on the long-term trajectory of the markets and remember that short-term volatility is part of the process. As always, please reach out to us if you have any questions!
Citrus Wealth Management
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Any opinions are those of Citrus Wealth Management and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and investors may incur a profit or loss regardless of strategy selected.