Is the World Going to Hell in a Handbasket?
If you watch the news, it seems the world is going to hell in a handbasket. And the news cycle is 24-7. I would like to give you some hope that was shared with me by my financial advisor today.
So here is a brief history lesson for you today that I hope can give you peace both in life and business. It is a conversation they would never have on TV.
Caveat, I am a Real Estate Coach and Small Business thinker. I am not a financial advisor.
Here we go....
Since 2000, our stock market has seen 10 downturns.
The 10 downturns, on average, lasted only 7 months (Again, this is an average as some were shorter and some were longer.)
The average downturn was 25%.
After each turndown, the market came back to significantly surpass the previous high.
REALITY CHECK: The market goes up and down, and while it may seem like there is craziness, the downturns only last on average 7 months. Whether making financial decisions, business decisions, etc., be careful on making decisions based simply out of emotion. Patience wins this one.
Let's go to the Jimmy Carter years. (Some would say our most beloved president, though I think he has someone that will take that title soon.)
The DOW Jones in 1976 was around 1,000 points, and by December 1981 was at 875 points. During this time, the market was more under than over a 1,000 points.
1976 - 1981, inflation went from about 5.7% - 14.7%. If during this inflationary time, someone placed $100,000 into a high quality investment fund with a history of rising income, the Dividend Payout in Year 1 was approximately $3,800. By 1981, the annual dividend payout was approximately $8,000. If you left the money in the account, that $100,000 would be approximately $202,000 by the end of this time period.
REALITY CHECK: People that did not panic and invested properly insulated their money even when inflation was out of control.
Fast forward to 2014, when Russia invaded Crimea. If in January 2014, you placed $100,000 into a high quality investment fund with a history of rising income, that investment would approximately grow to $172,000 by December 31st, 2019.
REALITY CHECK: Things can and will happen around the world. The worst thing you can do is panic. Focus on what you can control whether it be your investments in the right things, or the activities that must happen daily in your business.
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SUMMARY: Markets will ebb and flow, and industry will parallel these changes. The downturns tend to be short term. So don't get caught in the hype. Be careful what and who you listen to, and seek out the information. Don't assume the news will tell you this.
While things may be tough, especially my business owners, hang in there and know there are greater times ahead. Just be patient, and do the things you know you need to do day in and day out.
If you would like a connection with my financial advisor, send me a message, and I will make an introduction.
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