Negativity Sells… many things. Politicians recognized this long ago. One has only to endure a ‘political ad season’ to know that negativity must work as voters make their choices. It works in financial services too. How in the world is a brokerage firm (through one of their many ‘financial advisors’) going to get you to part with your hard earned money and make an investment if their pitch is something like, “stay invested for the long term and avoid the short term market noise generated primarily through the media to get you to act impulsively and on emotion”. Good luck meeting your monthly numbers that way, kid! Maybe try a different career?! You know what works…SAVE YOUR RETIREMENT FROM THE RUINS OF THE STOCK MARKET WITH OUR GUARANTEED, SAFE INVESTMENTS!!! Or…BUY GOLD NOW BEFORE THE US DOLLAR CRASHES AND BURNS AS THE FED KEEPS THE PRINTING PRESS RUNNING NONSTOP!!!! Has there ever been a ’safe’ time to invest, really? That poor broker has heard it a million times, over and over again, “I’m going to wait until things settle down before investing. Maybe call me in three months”! Investors have multiple ways to sabotage their investment success and, ‘waiting until things settle down’ is one of the classics. They might as well say, “I am going to wait until the train leaves the station before buying my ticket to ride” because that is exactly what many do.
BUT…let’s not suggest all is well out there. We have record debt, the Ukraine/Russia drama, ISIS and multiple hot spots in the Middle East that do not look as though they will have favorable outcomes. All this and having to watch the Bears on Sunday might be enough for anyone to decide to ‘wait until things settle down’ before investing. A quick review of history reminds us of the panic of 1873, the great depression of the 1930’s, World War II in the 1940’s, civil rights’ protests and burning cities in the 1960’s, out of control inflation and gas lines in the 1970’s and the dot com market implosion of 2000 along with 9/11, a new war in Iraq and then the market implosion of 2008 caused by….?? (you fill in the blank) A true financial advisor working as a fiduciary for clients might declare that the US has seen many years of problems throughout history and has had the resiliency to overcome.
What’s that I see…the S & P Index has moved up above its 5 day average for 29 straight days, a record last seen in 1928??? Gulp…even with all the aforementioned problems out there, markets climb and climb. Resiliency? For sure. Overbought? Let you know for sure in a few months…but I think I might wait until things settle down before investing!