The Stock Market Fear Motif
Somehow it has been five years already since I came to you with a similar note. Or not so much of a note as it is more of my perspective to what we are experiencing in the equity markets currently. As you are probably aware, the stock market is roiled in fear and panic selling. We are seeing pullbacks that are akin to the COVID crash of March 2020. During those days, which for all sorts of reasons are a stain on our humanity, phrases such as “COVID-19”, “shutdown”, “pandemic”, were used in the media outlets to instill fear in people generally, but also in economics and the stock market at the time. The markets liquidated 30+% in the matter of a couple of weeks. The world was shutting down and with it businesses and structures that kept everything we know and love in place. Except, it didn’t.
Today, terms like “tariffs”, “recession”, “The Great Depression” are the catchphrases permeating the airwaves. How many of you googled the Smoot-Hawley Act? That’s the thing about events that impact our lives, we do not act like ourselves. We focus on fear. That transmogrification changes who we are, who we were designed to be. We become riddled with anxiety.
The Bible says “do not fear” (or some variation of that) 365 times. I am sure that number is debated but it is surely a common theme in the texts. You do not have to be a Biblical scholar to recognize that in the Scriptures. It’s there for a reason. When you have qualities such as faith, discipline, steadfastness, God works it out for you. Possessing some of those same qualities for your finances including and especially with your investments, will prove a positive outcome as well. If we do not panic into the fear of what could be (and never actually comes), we will be rewarded. If we have a broadly diversified portfolio and do not get seduced by making a quick fortune on one company or asset class, we will be successful. If we understand and trust that the companies we invest in have leaders that will figure out a way to navigate economic changes, we will persevere.
The markets could snap back in a matter of months and make new highs as they did in 2020. Or it could take about two years as it did after 2008. The overarching theme is that companies find a way to return profits and growth to their shareholders over time and that will translate into higher stock prices. We just need to stay calm during this turbulent ride. And, if you have the means to take advantage of the fear exhibited by others (selling), I believe that you will be handsomely rewarded when buying while others are afraid.
As always, I am here to discuss this with you in further detail. Reach out to me to talk through whatever is keeping you up at night about all of this. We will get through it together.
In Faith,
Michael Anicito, CFP®, AIF®
https://go.oncehub.com/MichaelAnicitoCFP
