Let History Be Your Guide

In Hindsight: Let History Be Your Guide

There has been recent tumult in the markets, and I am sure you have noticed. We are hearing reports of "runaway inflation" and "a 2008 style recession." Nevermind the fact that predictions of these events are more common than dandelions in the springtime.

Remember all the times and events that caused panic and fear? Let's take this opportunity to go over the biggest stories of the past 10 years and see why we should be confident, despite the similar fearmongering headlines we see today. We can ask ourselves if our collectively short memory is causing us to relive the same negative emotional state regarding our investments that we have seen before.



We hit the debt ceiling, saw "Occupy Wall Street" protests erupt, witnessed the Greek economy collapse, and for the first time in history the S&P downgraded U.S. debt.


We approached what the fearmongers called the "Fiscal Cliff."


The IRS overreached and was proven to have engaged in audit malpractice, Detroit declared bankruptcy, and there was a federal government shutdown.


We lived through the Ebola epidemic , saw fighting in Ukraine, and Russia's annexation of Crimea despite world-wide condemnation, the Israel-Hamas conflict began, we saw the rise of ISIS, and a major crisis consisting of unaccompanied minors took place on the southern border.


The Greek economy was bailed out, and the IRS was hacked by a Russian crime syndicate.


We saw Great Britain finally leave the EU (Brexit), and the Fed increased rates in the U.S.


Despite the first major tax cuts passed in decades, the Fed increased rates even further.


We witnessed an intra-year market correction of over 20% in December, we began a trade war with China, unemployment fell to a 49-year low, the Fed increased rates yet again, and we saw many headlines about a "global economic slowdown."


The yield curve inverted, the Fed lowered rates, the federal government shutdown again, and COVID-19 began spreading in China.


The people in Hong Kong protested for their independence, and unfortunately lost, while COVID-19 became pandemic, followed by a 34% market correction in March and April, Black Lives Matter rioted in cities throughout the summer resulting in billions in damages and dozens dead, a record earthquake hit Utah, and to top it off, the murder hornets invaded.


We saw the January 6th protests, abrupt military withdrawal from Afghanistan and subsequent Taliban takeover, more COVID-19 variants, and inflation at its highest since 1990.
Crystal Ball

Hearing all of that at once might cause one to think that we just lived through the end of the world. If, in 2011, I came to you and showed you everything I just mentioned using a crystal ball, would you decide to invest the stock market? I doubt it!

Well, here is the kicker: during that same period (2011-2021) the S&P 500 grew from 1,271 points to 4,766 points. Almost quadrupling in value!

The is this: The headlines from the fearmongering news media will always be scary. International and domestic financial, economic , and political events will always feel absolutely important at the time they happen. The emotional reactions we have to these events will always feel reasonable.

Strategic Planning Group Logo

Strategic Planning Group once again asks our clients to remember their past. For all the market's history, there has never been a market drop or recession that we have not recovered from (and subsequently broken new records). There has also never been an apocalypse or a societal collapse despite the constant predictions by various pundits and commentators. We can always find a reason to fear the future and stay stuck in the past.

As always, our advice is to remember the basics and stick to the plan. Liquidity, diversification, and most importantly, forward thinking. Do not let current news cycles and fearmongering pull you away from the path that has prevailed successfully through the decades. Stay optimistic and with thoughts towards the long-term, and do not forget to enjoy the wild ride of life.

Sources: https://infoplease.com/search/Year+in+review?page=1

Leave a Comment