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There's nothing new under the sun...
The problems facing our society today are real and should be tackled with bold, determined, common sense leadership. That said; each month, year, decade, and generation has and will face its own and probably similar circumstances. There will always be pessimistic views that will provide reasons to avoid investing in the future. While it may sell papers and increase viewership, it is a horrible investment strategy to follow the headlines.
Capitalism 101...Investors bring capital to the markets. Businesses take the capital, add labor and raw materials to provide products and services to paying consumers resulting in a profit. Investors are rewarded for taking the risk of providing the capital. Fundamentally, this has not changed. We have, are, and will experience times when our portfolios will fluctuate. Over the long-term, companies have made profits and investors have been rewarded.
For the past several weeks there has been a drumbeat of criticism regarding the rise of the stock market as it seemed to be pushing faster and harder than the economy as a whole. The reasons for the recent decline are diverse and one would be hard pressed to point at any one thing that triggered the triple digit decline yesterday. As I write this, the DJIA is currently in a triple digit increase. An important note is that the underlying data on the economy is still improving despite all the market theatrics. As such, the markets are unlikely to have started another one of those multi-week plunges as was the case in the fall of 2008. A more important note...you are a long-term investor. Short term fluctuations are to be expected. |
