“Stocks Plunge!” “Second Recession Could Be Worse Than The First!” “Recovery Out Of Sight!” These are just a sample of the headlines gracing our internet. If you someone who likes to go face-down in the financial news, then you’re probably about ready to have aneurysm. Given that so many market watchers are foaming at the mouth and falling over backwards, why am I not? Here: allow me to draw a metaphor.
First, watch this video. You may want to turn the sound down, the woman’s voice is shrill.*
This is such an apt metaphor for how the markets work. The market gets spooked. The market moves and then takes a tumble. The experienced and professional people help the market back to its feet. Business proceeds as usual. The inexperienced non-professionals flip out, scream and panic. The market gets over it while the non-professional screams and quivers hysterically from the sidelines.
Freaking out does not solve problems, it only makes them worse. Our clients are paying us to approach their investments calmly, coolly, and rationally, and that’s what they get. These times are just another hiccup on the long road of what will be historical returns of the stock market. And if I’m wrong, if this is the one instance in United States history that the economy collapses into a thunderdome-studded dystopia of barbary and cannibalism, then my being wrong won’t matter much, will it?
And on that cheery note, adieu.
* You can’t see the video? It’s a shot of a horse drawing a carriage in Central Park, New York, spooking. It’s taped by a female passenger. The horse is spooked by a large group of bicyclists and begins walking backward. While walking backward, the horse stumbles over a curb and falls. The driver and another passer-by help the horse to its feet. Meanwhile the female passenger that’s taping the scene flips out. She’s hysterical and trembles.