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October Markets and the “Noise in the System”

“America is more divided now than it ever has been.”  Have you heard anyone say that? I have. Have you said it yourself? I haven’t. I recall reading about a bit of disagreement in the year 1861 through 1865 that seems to have been rather more severe. How about when our first president raised militia to put down the “Whiskey Rebellion” in 1794 — how divided were Americans on that issue?

Talk about issues, October was just about as much fun for the equity investor as a punch in the nose, wasn’t it? The media’s even calling it “Red October.” But did the October markets shake your confidence in your portfolio and your investment plan? Have you heard the doomsayers refrain, “no, really, it’s different this time?”

How about the recent Supreme Court nominations hearings, did they get you down too? There, I don’t blame you – it did get me down as well — but I submit to you that there is “nothing new under the sun.” here. To wit: in 1861, in a dispute over suspending habeas corpus, President Lincoln issued a warrant for the arrest of Justice Taney (never arrested, however).  Just before his death Taney wrote: I have no hope the Supreme Court would ever again be restored to the authority and rank which the Constitution intended to confer upon it.” Does that sound like recent woeful predictions saying the balance of power is shifting to the Executive Branch, and the Constitution is irreparably damaged?

Learn from history: amongst turmoil can be growth

Well, if you’re as old as I am, you’ll remember first-hand the upheavals of the 1960s. That decade was like something out of Charles Dickens; they were the best of times, they were the worst of times. Remember: Watts Riots, Jim Crow, assassinations that shook the world, Students for a Democratic Society, the 1968 Democratic National Convention, church bombings, and more?

But the 1960s in America were a great time of success, too. Vaccines were developed and polio, measles, mumps and rubella and were no longer the scourge of childhood. The Civil Rights Act of 1964 and the Voting Rights Act of 1965 became the law of the land. The economy grew with a fevered rush in the 60s.  Over a five-year stretch beginning in 1962, the GDP grew at 6.1%, 4.4%, 5.8%, 6.5% and 6.6%. The country did not see a recession until 1970.  And the space program took flight.

I took my 27-year-old daughter to see First Man, a biopic of the life of Neil Armstrong during the years of the Apollo program.  As we walked out, she exclaimed, “Dad!  We went to the moon with basically walkie-talkies!”  “Yes, dear daughter, we sure did.”

We don’t have it worse in 2018.

So why recount all this history? It is so we can remind ourselves, and others, that no it is not — in fact — worse this time around. You know the problems in our society, we are practically bombarded by them daily, whether on the news or social media. But the sky is not falling, and there’s a whole lotta noise.

A positive news story

The good news?

  • The United States has less than 5% of the world’s population and produces about 25% of the world’s economic output compared to China at 20% and 15%, and Japan at 2% and 6%, respectively.
  • Mortality rates from cancer in the US have dropped every year for the last 25 years.
  • The same is true for deaths from heart disease and stroke.
  • Do you need new organs for transplant? Bioengineers are beginning to grow lungs and livers in the laboratory!

It’s a wonderful time to be alive.


Don’t let the October markets mislead you

It’s also a wonderful time to be an investor, while I do understand that November 2018 will probably not be a “wonderful” time to look at your account statement.

Let us all remember that the success of your investment portfolio does not depend upon an all-time highest account value in any given year. You have a well-thought-out investment and retirement plan.

Don’t let short-term events — the “noise in the system” — lead you astray!

November 2018


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.


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