I thought one of my favorite quotes would be very timely today by Dr. Martin Luther King, Jr., “Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.”
Whether discussing political issues, personal challenges, or economic and market forces this quote provides great perspective.
Fear does not drive out fear; courage can do that.
We live in a world of fear. Every media outlet is full of negative headlines from politics to business, and even entertainment. Fear can motivate, but it has limitations. Courage, confidence, and trust are far more motivating over the long-term.
Courage, confidence, and trust are also required for equity investors. The courage to go against the grain when there are more sellers than buyers, the confidence that risk will continue to be rewarded over long periods of time, and a trust that innovation and enterprise will survive and thrive to create a better future.
The recent market selloff has stoked plenty of fear. Investors want to know how much further markets can fall, how long the downturn will last, and when the bottom will be. The reality is that nobody knows. What we do know is that these market corrections are normal; they can get worse before they get better, and it has been proven nearly impossible to time the market bottom.
Peace of mind comes from the ability to control what you can control and understanding patience is a virtue. By spelling out the goals and constraints of your financial situation in an Investment Policy Statement, it allows us to prudently allocate capital based on your specific wants and needs to take advantage of the opportunities which the market presents.
Banks are well capitalized, corporate profits and liquidity are high, consumer’s balance sheet and sentiment are strong, and monetary policy continues to incentivize risk taking.
We invest to grow, and fear stuns growth. With the appropriate perspective, strategy, and execution; other’s fears will create greater long-term growth opportunities for those prepared.
All comments and suggestions are welcome.
Tony Basalla