March 28, 2016

Do you remember the financial crisis back in September 1999?

When the headlines of newspapers or the lead stories on the newscast start with “Market Plunges”, “Stocks Dive” or “ Disaster on Wall Street”, they are usually followed by a reason why the stock market did what it did. I like to call that reason, the Crisis of the Day.

In the many years I have been an advisor, I have seen countless crises that have been the reason of market volatility, market crashes or the end of the investment world as we know it. Presidential elections, wars, terrorism, foreign markets such as China, strong dollar, weak dollar, oil prices, inflation – you name a crisis and chances are that it has been used as a scapegoat for stock market decline. There has always been a crisis and there always will be a crisis. Remember, news agencies are in the business of making money. They will lead with what sells and nothing sells better than fear!

In our world, we are perpetually bombarded by bad news every minute. When that bad news is about the stock market, panic and fear ensue. These are normal emotional responses, but that normalcy doesn’t make it feel good. As with a cold, the decline in the stock market will eventually pass. Panic and fear should never be the driving force in making investment decisions. Notice I used the word never.

So, do you remember what the end of the world crisis was back in September 1999? How soon we forget.