Investing should be more than good or bad feelings about the market, but frequently it is not. We warn our children how to behave, we should also guard our reactions to the market. Googins Advisors attempts to be Behavioral Investment Counselors with meaningful facts and advice.
We believe in the market and how it is…can be…a force for good in everyone’s lives. Anyone can have an account and “yesterday”, July 23, was another example of the market telling us it has many panics and misadventures, but the market is a “good place to live.”
We commend clients for turning the noise off and taking a long term perspective of the stock market, but we also receive calls as the media directs attention to problems and panics. Markets were at an all time high recently, yet people ask what they should do in an awful environment…..Awful?
In March 2000, the dot-com bubble imploded*(see Volker summary) and companies failed.
September 2001, planes flew intentionally into our buildings.
December 2001, Enron failed.
Accounting frauds were seen in following years and more companies destroyed.
The market was down 49.1% by March 8, 2002.
Subprime mortgages and complex derivatives led to the 2008 Financial Crisis.
The S&P500 peaked in October 2007, then fell until March 2009.
After an accounting change, the markets soared beginning March 9, 2009
And the market compounded at 16% for the next 16 years!
Around the world, Greece was bailed out and European governments failed.
Novel coronavirus swept the globe in 2020.
The market seesawed as it always does.
If you invested $100,000 in the S&P in 2000, it is now worth approximately $600,000. Since the S&P is an average of all stocks, it does not mean it is the best possible return.
We consider $600,000 average payment for being pelted with fear frequently as the years and months go by. When I started investing, I had two goals. Help myself, help others. We think money is a good item. There is no “greedy capitalism” with good people. We will never understand the whole market, we do not need to. As Nick Murray says, “This time it’s different” is never true. The great and good companies do recover.
I start out with a plan to write about different ideas, but end up talking about the market because it is wide and inclusive for all. You can use crypto currency, rare earths, gold, silver and other ‘alternatives’ as you choose, and they may do very well, but it is wise to also invest in the “great companies of capitalism.” When we control our emotions, the stock market gives us great returns.
There are additional ideas to think about. (1) QCD’s (qualified charitable retirement deductions) allow people over 70 1/2 with charitable intent to make gifts totaling $105,000 out of their IRA’s thus reducing the taxes paid on that retirement income. (2) The “Big Beautiful Tax Bill” attempts to save taxes for you while maintaining the upper limit of money that can be passed on without additional taxes to beneficiaries – $15,000,000. (3) Understanding and using the standard deduction in your income taxes which is meant to help the largest, lower group of tax payers. It is not as easy as it might seem.
Call our advisors for help and more ideas that are good for you.
Sincerely,
Sincerely yours,
Louise Googins, President, Investment Advisor
Richard Martin, Investment Advisor
Michael Googins, Administrator
Kim Rankin, Accountant
Lynne Goldsmith, Investment Advisor
Dayton Hoffmann, Investment Advisor
Cole Toennies, University of Wisconsin Intern
*March, 2020 – the month the dot-com bubble burst. Ronald Reagan became President of the United States on January 20, 1981. We had been experiencing strong inflation. Paul Volker, as Fed Chairman installed by President Carter applied high interest rates and the savers “loved” them. Ronald Reagan supported Volker’s actions and the economy “righted” itself. We had wonderful markets and economies in the 1980’s and 90’s but speculative excess was moving into the market and in March, the explosion occurred. But still, the market did well.