We just witnessed history as the S&P500 and the NASDAQ reached record highs on Tuesday, April 23. One of our common refrains is to ignore the news media – at least as it relates to your investment portfolio. If you strictly followed that advice, you saved yourself six months of media nonsense.
What a difference one short calendar quarter makes! At the end of 2018, the media trumpeted the S&P 500’s worst year since 2008 and its worst fourth quarter since 2011. A bear market was predicted just before Christmas, as the market was down about 20% from its previous peak in October. Then, a mere three months later, that same media announced the market’s best two months since 1987! And, lo and behold, the market has now rebounded. This type of reporting clearly does not help investors stick to financial plans, while saving for retirement or living through it.
How about an example spanning not just three months, but 10 years? We’ve attached an article by First Trust titled “Ten Years Ago…” that was written on March 11, 2019. It describes the incredibly negative economic data being reported on and around March 8th, 2009 and then highlights some of the incredibly positive events that transpired during the ensuing 10 years, including the performance of the market. We believe it provides valuable context for how long-term positive events are often indiscernible in the short-term, as well as encouragement to remain invested over complete market cycles.
As responsible reporters, we don’t predict the current direction of any market, but we enjoy reminding you that what just happened has been repeated hundreds of times and that new market highs are a normal occurrence.
As always, we welcome your visits, calls and emails as we work together to achieve your various financial goals.
Karl Kuelthau, Author, Principal
Louise Googins, Principal
Michael Googins, Administrator
Kim Rankin, Accountant
Carson Bieber, UW-Madison Intern
Logan Donovan, UW-Madison Intern
Mckayla Johnson, UW-Madison Intern