The investment business, like most professions, loves clichés and acronyms. Bull, bear, WTI (West Texas Intermediate crude oil), recession, depression, junk (as in low rated bonds), dead cat bounce (when the market fakes you out like it’s going to bounce back and doesn’t) etc., etc. It’s all meaningful and primarily intended to make those in the industry look and sound important – maybe smarter than average bear. However, in times like we’ve seen lately – unprecedented times – I don’t care who you are. No one is that smart!
There are those, in my opinion, who may be smarter than others. People that are capable of sticking to a strategy rather than responding to emotional reactions. Unfortunately, that seems to be why the rich get richer and the poor get poorer.
I have professionally experienced the 1987 crash (affectionately known as Black Monday – speaking of clichés), 2000 – 2002 debacle (the dot.com bubble – another cliché), 9-11-2001 (we just call it 9-11 sort of like a convenience store though it was horrific and changed the way we live.) Then in 2002 we had hanging chads in Florida that led to a botched Presidential election. That year Worldcom, Enron and others went bust. Next was the Great Recession 2008/2009 which may be best known as the subprime housing mortgage crisis (who had ever heard of a derivative before then or subprime mortgages for that matter?). Then 11 years of relative bliss – with a few hiccups along the way. Incidentally, since I know you might be interested, I was introduced to the financial services industry in 1986 following a 9-year stint in the oil and gas industry. In July of 1986 oil fell to around $10/barrel. I remember that number and $205/week – the amount of unemployment I drew for a few months. Strange? $10/barrel and $205/week. Funny how some numbers stick in your head. Yes, I’ve seen some ups and downs and somehow survived them all. I, and those around me will survive this one too!
No, I don’t know when this one will end. However, I do believe in the tenacity of Americans. Perhaps, I adhere to the famous Winston Churchill quote “Americans can always be counted on to do the right thing…after they have exhausted all other possibilities.” I think he was right then, and it seems we are in the process of getting our act together now. It will take some time, but we will overcome both the effects of the coronavirus and the oil price war between Saudi Arabia and Russians.
Though it may not feel this way, with each passing day we see progress. In fact if it makes you feel better, the recent bouts of market volatility appear to have been caused by institutional trading rather than individual investors. Abby Schultz of Penta reported:
“…individual investors are largely sitting tight, according to survey data from Spectrem Group in Chicago. About three-quarters of investors with $100,000 to $25 million in investable assets who were surveyed between Wednesday, March 4…and Monday, March 9…did not change their investment portfolios at all in light of the market sell-off…Among those with $5 million to $10 million in investable assets, as well as those with $10 million to $15 million, 31 percent bought stocks in the last 20 days…Among those with $15 million to $25 million, 39 percent bought stocks…”
I can tell you as I sit in my office at One Bellemead Centre that it is eerily quiet. Of course, we are sending out mountains of information to keep our clients informed. Frequently I am getting calls or emails asking what we should be buying. So my personal experience – and that of my partners in our firm, is exactly in line with the survey data from Spectrem Group in Chicago. Congratulations to all. So far, so good. We are not the ones driving this market down and are keeping cool heads. Hopefully soon we’ll see a day when we are rewarded for our intelligent approach to this extraordinary time.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful. Performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Investing involves risk including loss of principal. This material was prepared in part by Carson Group Coaching.
Visit us at www.williamsfa.com. Tommy Williams is a CERTIFIED FINANCIAL PLANNER™ Professional with Williams Financial Advisors, LLC. Securities offered through Private Client Services, Member FINRA/SIPC. Advisory Services offered through RFG Advisory, a Registered Investment Advisor. Williams Financial Advisors, LLC, RFG Advisory and Carson Group Coaching are separate entities from Private Client Services. Branch office is located at 6425 Youree Drive, Suite 180, Shreveport, LA 71105.