As part of last month’s holiday’s traditions, perhaps you caught the Grinch’s annual TV appearance. The green Seuss creation with the undersized heart had no tolerance for the “noise, noise, noise, noise” that came out of Whoville on Christmas morning.
In the financial services and investing sector, every day is Christmas in Whoville – the noise, noise, noise, noise bellows from the financial media, and much like the Grinch it’s a sound I “can’t stand in the least.”
Now before you accuse me of “grinchiness,” I am as moved as anyone by the sounds of children singing. But those aren’t the kinds of warbles we get from the financial media. Quite the opposite of a joyful noise, their favorite songs are “Carol of the Sells,” “Do You Fear What I Fear,” and “Grandma Got Run Over By Her Hedge Fund.”
Inducing fear is not only a year-long tradition, it is remarkably impervious to market conditions. As evidence, witness the cover stories we’ve seen over the last six years (during an historic bull market run) from just one source: Time Magazine:Investors who didn’t cave to the bombardment of “bad news” did quite well to stay in the markets since 2009. Barring an extraordinary reversal, 2014 will end at or near all-time market highs, continuing a run of six straight positive market years, beginning with the low point of the Great Recession in 2009.
This is a good opportunity to pat yourself on the back, but save a pat or two for your Northstar advisor! Working together, we’ve weathered the real economic storm of the Great Recession as well as the imaginary one brewed up by the financial “experts” and “gurus.” OK, back-patting time is over. We know a down market is coming. We don’t know when it will start or how deep it will go, but it will come, and our resolve will once again be tested, both by real events and the “noise, noise, noise, noise” of the financial press.
Perhaps it will be easier the next time around, knowing we came out well the last time, but every business cycle is different because we are different. We will be older when the next pullback begins and therefore less risk-tolerant. That makes now a good time to ask yourself, “Am I ready?” “How will I feel if my account goes down 10%? 20%? Or more?” Not easy questions to answer, but if you aren’t feeling comfortable, come on in and talk to your advisor. Consider it a “well-care” visit that may prevent a trip to the urgent care clinic later.