I started in the financial planning industry in late August 1987, just a few weeks before Black Monday, when selling pressures in the stock market accelerated and by the end of the day the Dow Jones Industrial Average had dropped nearly 22%. One of my claims to fame is that I was actually in the business during the stock market crash, and yet I had no clients lose money that day. (That is mostly because I was so new in the business, that I didn't really have any clients yet.)
Fast forward to the end of October 2018, which also happened to be a lousy month for the stock market. Markets dropped nearly 10% during the month, the second time that had happened this year. Yet from the bottom of the market in October 1987, when the S&P 500 finished at 247, to the end of October 2018, when the S&P rose to 2740, the markets increased tenfold.
Think about all of the events and crises that have happened over that 31-year period of time:
- Two Persian Gulf Wars
- A Presidential Impeachment
- The Asian currency crisis and the failure of Long-Term Capital Management
- The Dot-Com bubble
- The Real Estate Bubble
- The Sub-Prime Mortgage Crisis
- Failure of AIG/Lehman Brothers
- The TARP Government Bailout
- European Banking and Refugee Crisis
- Multiple Debt-Ceiling and Government Shutdown Issues
This is actually a relatively abbreviated list of the headline crises that we have faced over that time period. Each of these times, headlines were made, and people in the media warned us that the end of the financial world was coming...yet again. However, the markets subsequently moved higher, as capitalism and free market economies overcame the crisis du jour.
We understand that uncertain markets sometimes create discomfort and fear. That is a natural, emotional response to the news you are being inundated with. However, we know from history that people make poor financial and investment decisions based on short term thinking and emotion. From the headline examples above, stock market downturns are a normal phenomenon that investors should expect and anticipate.
As a client of Impel Wealth Management, we are here to help you through these times with education, research, discussions and with age and risk-profile appropriate asset allocation strategies matched to your financial goals and risk tolerance. If you have questions or need to talk during times of market dislocation like we have been recently experiencing, re-read the list of previous financial crises above, realize that the world is not coming to an end tomorrow, and please do not hesitate to give us a call.
We are here for you as we are all "Moving Life Forward" together.
*Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.*