Familiar or Unfamiliar Territory....?

Well, the election is behind us and the outcome proved one thing—never base a major decision on speculation.  I think we were just reminded of a very important lesson.  The media does not always, if ever, know all the answers.  However, my biggest gripe with the election was not with who won or lost or the fact the media had it all wrong … it was the fact that the markets were supposed to tank with a Trump victory.  The emotional barometer for pre-market hours, futures’, were predicting a market drop of 500+ points after Election Day.  What actually happened was a series of record highs for all the stock market indexes. 

The market is more familiar than you think and it is affected by more than our recent Presidential election. 

All things money related have a common thread.  We tend to ‘fear the unknown,’ but what we do not realize is that the movements of the economy, and by extension the stock market, are more familiar to us than we realize.

Let’s take Warren Buffett’s company Berkshire Hathaway for example.  Many of you reading this may or may not own stock in Berkshire Hathaway, but I will bet all of you are supporting its businesses.  If you have ever enjoyed a piece of See’s Candy, jogged around the block in Brook’s running shoes, prefer Heinz ketchup or bought that new 50” flat screen at RC Willey, then you are supporting Berkshire Hathaway. The company solely owns all, or a good percentage of, the companies mentioned.  Not to mention many other household names. 

The common thread to being successful in the market is remembering that while the markets can be volatile, they generally produce long-term growth for patient investors, retired or not, due to the interrelated nature of the economy such as what is shown above. Perhaps one of Berkshire Hathaway’s companies goes down in value, there are still many more to help balance out the company as a whole.  

One of the largest challenges facing our retirees today is the struggle for yield, or income producing investments.  The current low interest rate environment is making things extremely difficult for retirees to safely provide an income stream … or so they think.   Long-term the markets are efficient.  Two things are certain as it relates to the stock market (or bond market), it will at some point go up and it will at some point go down.  However, long-term the general trend is up.  Don’t believe me?  Give me a call and let’s chat.

Please remember that investing is for the long-term.  Short-term market cycles should not dictate your long-term strategy.  While the markets can be volatile, as they have been the past week or so, you must stay the course.  If you stick to the familiarity of your long-term strategy you can be on the path to arrive at your destination safely. 

Please take some time this week to enjoy the Thanksgiving Holiday, with family, and realize that we have it pretty good in the good ole’ USA regardless of what political party occupies 1600 Pennsylvania Ave.

Until next time…..

Darin