Approximately twice a year, the stock market delivers three to four weeks of consistent negative returns. It is not an unusual event, but it is most certainly an uncomfortable one. If the trend lasts long enough, it becomes a regular feature on the evening news. And for some people, it means that the financial worlds are coming to an end. In truth, the markets are doing what the markets do. What bothers me more than the actual decline, as it is happening, is that everything is forgotten once the markets' regain their footing. Then, when the next systematic downturn occurs, the sky falls once again. People will always worry that this decline must be the ‘big one’, conveniently forgetting that a very similar event just occurred a few months earlier. It’s no fun to see that your portfolio has declined 5%, but you also must appreciate that the dip comes after a 10%-15% increase. And if you give your investments enough time, the current blip, even if it is the next big one, will one day be a distant memory. Investments are just one of the many variables that make up a sound and hopefully successful financial plan. So why do they get the most attention? Why do they get the most ‘ink’, or ‘click’s or whatever is your preferred media’s nomenclature? My theory is that we are always in a hurry to see the results. Regardless of the task in question, we want to get to the punchline quicker and quicker with every generation. It might be because of technological advances, changes in media coverage or some other random variable, but our level of urgency has increased over the last few generations. Add to that the availability of information and you have a populace of hyper-aware, overly curious investors. There is an ever growing need to know everything right now! Give me the scores, now! Give me the election results, now! Give me my TV dinner, NOW! There are plenty of news articles, university studies and general conversations about how society has lost the ability to enjoy things slowly. We can’t relax. We aren’t willing to wait. In measuring how we are doing financially, there are few indicators as in our face and in real time as stock prices. You can turn to the financial news and watch people scream information at you. Who could have ever thought that numbers scrolling at the bottom of the screen in green and red shading could be so exciting?? You know what’s not exciting? Watching your mortgage balance, credit card debt or school loans slowly going down. Every month, or possibly every other week we watch as the balances tick down ever so slightly. Tick………..tick………………tick. In between payments we forget about our progress. You certainly don’t hear about these subjects around the water cooler. ‘Hey Bob! I made a killing overpaying my mortgage by 10% each month!!’ Yet, paying down debt can be as important as investing, if not more important. I would even argue that paying off debt is a bigger victory than making a sound investment choice. But it’s not as glamorous, and it certainly isn’t as in your face, as market returns. I’m not sure where I would rank market returns as an indicator of economic health. It certainly would not be the number one variable. And short term returns wouldn’t even make my list. GDP numbers come out every quarter, and while it makes the news it does so with a whimper at the end of most evening newscasts. Employment numbers come out monthly, but again, when is the last time that statistic lead the news. And who wants to wait? I don’t have time to wait 30 whole days for consumer confidence numbers to determine if I should delay my big financial decision! I can watch the talking heads scream on TV right now! This month’s ‘For Your Consideration’ is a simple reminder of the truism you hear over and over again but can be difficult to accept. Important things happen slowly. Focus on your long-term accomplishments and not short term results. And if you are the type of person that is guilty of needing new information or a new story all the time, accept that most things are temporary and not always worth a reaction. And if all else fails, turn off the news and go outside.
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