"(What's So Funny 'Bout) Peace, Love, and Understanding" is my favorite song from the other Elvis. It was written in 1974 by English singer/songwriter Nick Lowe. The song was famously covered by Elvis Costello and the Attractions and had great popularity both in England and the United States, where it played in regular rotation in the early days of MTV. It was included on the American version of Costello's 1979 album Armed Forces.
Source: Discogs
Rolling Stone magazine has ranked it the 284th best song of all time. Below is a YouTube link to the original MTV video for those who are not familiar with it.
Elvis Costello & The Attractions - (What's So Funny 'Bout) Peace, Love And Understanding
In 2004, the song was regularly performed as an all-star jam on the Vote for Change tour. During the October 11th concert at the MCI Center in Washington, D.C., the song was performed by Bruce Springsteen and the E Street Band, the Dixie Chicks, Eddie Vedder, Dave Matthews, and John Fogerty with Michael Stipe, Bonnie Raitt, and Jackson Browne. A link to that classic concert video is included for your enjoyment as well…because it's awesome!
Bruce Springsteen: What's so funny 'bout peace, love & understanding
Given the current political climate and the upcoming election season, along with the very unusual, post-COVID economic environment we have experienced over the last few years, I thought the song and its lyrics would provide a great backdrop for today's mid-year discussion and update.
As I walk through this wicked world
Searchin' for light in the darkness of insanity
I ask myself, "Is all hope lost?
Is there only pain and hatred and misery?"
And each time I feel like this inside
There's one thing I wanna know
What's so funny 'bout peace, love and understanding? Oh-oh
What's so funny 'bout peace, love and understanding?
Before I get into some specifics regarding the first six months of 2024, I want to remind you about several timeless truths that endure about successful wealth management.
- Impel Wealth Management desires to help our clients be goal-focused, plan-driven, long-term investors. Our portfolios are constructed from and driven by our client's most important lifetime financial goals, not the day-to-day headlines of the markets and the economy.
- No one has ever been able to consistently forecast or time the markets and the economy. Therefore, we believe the best strategy is to develop portfolios designed to help our clients accumulate the resources necessary to reach their financial goals. Unless your goals have changed, neither should your overall portfolio.
- We agree with Warren Buffett that the best way to capture the long-term upside of the financial markets is to not interrupt the compounding over future years and decades.
- We prepare our clients to ride out the inevitable but temporary market declines by creating enough liquidity in their accounts to meet their cash flow needs for the next several years, thereby negating the necessity to sell low when markets drop.
With those cornerstones set as our foundation, let's explore what has happened so far this year:
From an economic standpoint, US GDP continued to grow, albeit at a slower pace than in 2023. Additionally, the stock market has continued to rise. This has been driven by a combination of earnings growth and a perception that moderating inflation would allow the Federal Reserve Bank to start cutting interest rates.
Early in the year, it was believed that the Fed would cut interest rates as many as six times this year. However, here we are in July, and there have been no interest rate cuts…yet. While the Fed has been firmly focused on getting inflation under control over the last year, they are now also talking about unemployment starting to rise as an additional factor that may allow them to start lowering rates.
The stock market, as measured by the S&P 500 index, has hit multiple all-time highs this year. The main impetus for this has been strengthening and broadening earnings and rising dividends. We believe that these two factors will continue to drive stock prices more than other issues, such as the federal debt, the upcoming election, Federal Reserve Bank policy, geopolitical events, or the latest crisis du jour that happens to be crossing the internet and social media on any given day.
With markets having risen so dramatically in such a short period of time, and with election news in the headlines over the coming months, it would not surprise us at all to see periods of volatility or downturn. As a reminder, the average intra-year stock market decline is more than 14%. However, for those who were patient and held on during the inevitable bouts of volatility, the market has produced positive returns 75% of the time since 1980, as you can see in the chart below.
Source: JPMorgan Guide to the Markets
And as I walk on through troubled times
My spirit gets so downhearted sometimes
So where are the strong, and who are the trusted?
And where is the harmony, sweet harmony?
'Cause each time I feel it slippin' away, just makes me wanna cry
What's so funny 'bout peace, love and understanding? Oh-oh
What's so funny 'bout peace, love and understanding?
As we turn our attention to the upcoming election, it is only natural to believe that all the negative news and noise screaming at us each day will inevitably have a major impact on the economy and the markets. Our political backdrop has continued to become more bitter and divisive, as evidenced by the recent assassination attempt on former President Trump. We should all be disappointed and unaccepting of the current state of events.
When Rachel and I were in Europe recently for our 10-year wedding anniversary, we happened to meet a couple named Russ and Louise from Vancouver, Canada. We were seated next to them at lunch one day. Unfortunately, political comments from someone seated near us exposed the fact that we had very different political viewpoints. However, we chose to focus on the things we had in common and that we all enjoyed. Despite our political differences, we saw them many times on our cruise, and when we left, they hugged us goodbye and wished us the best. It was a reminder that it is possible for people who have differing viewpoints to focus on their commonalities and still enjoy time together.
I have shared with you numerous times and will continue to reinforce over the coming months that markets generally do not care who wins elections. As you can see in the chart below, over the last 90 years, markets have continued to advance at a compounded rate that would help people reach their financial goals, regardless of who was in control on Capitol Hill.
So where are the strong, and who are the trusted?
And where is the harmony, sweet harmony?
'Cause each time I feel it slippin' away
Just makes me wanna cry
What's so funny 'bout peace, love and understanding? Oh-oh
What's so funny 'bout peace, love and understanding? Oh-oh
What's so funny 'bout peace, love and understanding?
Armed with this information, let's strive to be the strong and the trusted. Let us try to be the voice of reason and sweet harmony as we move forward during this year's political season. In that way, we can be the ones giving and hopefully receiving some peace, love, and understanding!!
Let's stay focused on our financial plans and our portfolios, which are designed to help us accomplish our goals. The more we remain focused on the foundational building blocks, the better our chances of avoiding an emotional overreaction to the headlines and markets' day-to-day gyrations. I believe this will give us the best chance of success in the long run.
Thank you for being a client of Impel Wealth Management. It is a privilege to serve you as we continue “Moving Life Forward.”
© 2024 Jesse Hurst
Senior Wealth Manager and CEO
The views stated are not necessarily the opinion of Cetera and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
Neither Cetera Advisors LLC nor any of its representatives may give legal or tax advice. This information is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.
Investors cannot directly invest in indices.
Featured Blog Image Source: iStock.com/Oleksandr Hruts