In Hawaii the coming of Spring is celebrated with Lei Day honoring the King, Queen, and royal court, teaching history through song and dance. The celebration is festive and enjoyed by families and friends coming together with Aloha Spirit to reflect on Hawaiian culture and the changing of the seasons. When we reflect on any historical time we are almost forced to see ‘the big picture’. It allows us to understand that what may seem important at the moment is not necessarily so. More importantly, we learn that we don’t remember the money or the markets, but the people and the times shared together.
We all know there’s tension in the air in relation to the market right now. You are likely hearing words like recession, inflation, rising interest rates, bear market, etc., The stock market channels and news are currently drawing people in using these words. Why? It gets your attention. You might find yourself feeling anxious, asking yourself questions like “Should I sell since it sounds like a recession is coming?” If you are asking this question it is likely based on emotion. Fear. But the truth is, most financial decisions made from emotions are not productive decisions. We want to make decisions based on facts. The facts are that the market is down more than 10% this year and there are many years where the market has 10% pullbacks. In fact, this is not unusual, this is not an aberration, this is pretty normal. Another fact; when investors try to time the market they often do worse than if they just stayed in and rode it out. I am including two charts that show historical information on these points:
In the near future, it’s possible the market will go further down, it’s possible the market will go up and we cannot control that. What we can control is keeping funds that you will likely need in the near future in safer investments, diversification, and staying put!
So, in conclusion, I’m wishing you a beautiful start to the Spring season, and let this be a small reminder to pay attention to the things that matter. Go outside, enjoy time with family and friends, and perhaps even watch a little less news. If you get anxious about the markets, ask yourself, “Will you remember this in 2 days? Will you remember this in 2 months? Will you remember this in 2 years?”
Happy Lei Day!