“(Your Love Keeps Lifting Me) Higher and Higher" is an R&B song written by Gary Jackson, Raynard Miner, and Carl Smith. It was recorded by Jackie Wilson for his album Higher and Higher. Released in August 1967, the song reached number one on the US Billboard R&B chart and, in November, peaked on the Billboard Hot 100 at No. 6. The encouraging and upbeat song, which you can hear in the link below, includes the following lyrics:
https://www.youtube.com/watch?v=mzDVaKRApcg
Now once, I was down-hearted
Disappointment, was my closest friend
But then you, came and it soon departed
And you know he never
Showed his face again
That's why your love (your love keeps lifting me)
Keep on lifting (love keeps lifting me)
Higher (lifting me)
Higher and higher (higher)
An internet search shows that there are more than 100 cover versions of the song that have been recorded since its release. One of my favorite versions comes from Bruce Springsteen and the E Street Band, along with Darlene Love, John Fogerty, Sam Moore, Billy Joel, and Tom Morello who performed the show during the 2009 Rock and Roll Hall of Fame induction ceremony. A YouTube version of this amazing and fun performance can be seen In the link below.
https://www.youtube.com/watch?v=jKnvTjVlB1k
I am using this song as a metaphor to remind you that two other things also keep lifting us higher and higher. These are the earnings of America’s best-run companies and the dividends they pay to their shareholders.
We know that in order to get the historically superior returns that the stock market has provided over time, you must be willing to hold on through the significant and unpredictable ups and downs of the market. You can see from our first chart below, that in just the last five years we have experienced three significant periods of volatility. Nevertheless, due to a psychological phenomenon known as recency bias, most people do not remember why the stock market fell 20% from September 20th to December 24th, 2018.
Staying on this roller coaster ride requires a fair amount of discipline, as well as the belief that a capitalistic, free-market economy will produce returns that will help you and your family build the capital necessary to accomplish your long-term financial goals.
To help bolster your understanding and belief, we are providing a second chart below that takes us through the three stock market downturns of 40% or more, that have occurred in the last 50 years. It also shows us how much the stock market, corporate, earnings, dividends, and inflation have risen over that time.
A quick glance at the chart will show you that over the last 50 years, inflation has risen 7X. However, the earnings of the 500 largest companies in the United States have grown by more than 35X during the same time, while the dividends they pay their shareholders have grown by more than 21X. This has led the S&P 500 to rise more than 32X over those fifty years, more than quadrupling the rise of inflation.
The CFPs of Impel Wealth Management strive to help our clients live through the volatile and uncertain sequence of returns by maintaining 2 to 3 years of reserves in cash, short-term bonds, and dividends. We have found that having enough liquidity to cover your income needs several years in advance helps people live through the inevitable bouts of volatility that accompany their financial journey.
We thought that this visual reminder would help give you an extra dose of confidence and wisdom during the seemingly never-ending stream of negative financial news. We know that you have heard this story from us before. However, we are also aware that this type of financial encouragement is like vitamin C. You need a dose regularly because your body does not store it.
We want to provide the antidote to negative financial journalism so that you and your family can accumulate the resources needed to live your best life. This is what drives us as we continue “Moving Life Forward” together. The next time you are feeling nervous or uncertain, please pull out your copy of the chart above, and take another dose of financial Vitamin C. You will then be reminded that corporate earnings and stock dividends have lifted us higher and higher, just like Jackie Wilson and Bruce Springsteen sang.
© 2023 Jesse Hurst
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.
Investors cannont directly invest in indices.