29 Sep 2022 Don’t Panic
Sam published the first Beacon Investment Management Friday Brief on June 1st, 2001. At the time, we were experiencing the bursting of the Dot-com bubble and, though Sam didn’t know it at the time, our country was just 3 months away from the September 11 terrorist attacks. Sam’s idea for the Brief was that it would be a way for him to communicate with his clients in a consistent and meaningful way, especially during times of uncertainty.
21 years later, the Friday Brief is still up and running. These days our company has a new name and the brief has new authors but the intent is still the same. Patty, Ellen, Jared, Ryan and I hope the Friday Brief is a comforting Beacon of light during stormy seas and uncertain times. We also hope that it is a welcome and enjoyable addition to your inbox each Friday morning during times of smoother sailing. We are all so thankful for the time you invest with us each week as you read our work.
As I write today’s Friday Brief, we find ourselves in the midst of a hurricane, both literally and figuratively. The forecast for Raleigh this weekend calls for gusty winds and plenty of rain and the path of the financial markets seems equally unsettled. 2022 has been a tough year to be an investor. Year to date, the S&P 500 is down 20%, bonds are taking a hit, even gold, which is typically thought of as a hedge against inflation, is down 10%. Global economic conditions have created a scenario in which there’s really been nowhere to hide. So far, the U.S. economy seems to be faring better than the rest of the world, but the Federal Reserve’s aggressive response to surging inflation will likely slow it down as well. So here we are, in a bear market, probably a recession.
It’s during times like these that it becomes easy to lose sight of the bigger picture involving our investments. When it comes to our portfolios, we become too focused on the price of the Dow Jones Industrial Average and forget that we’re investing our dollars today for a share of the long-term profits of creative and interesting global businesses. It reminds me a something Sam wrote many years ago:
“The danger of focusing on the stock market as a singular entity is to lose sight of the fact that it actually represents thousands of companies run by many more thousands of smart people busily innovating, creating, and producing goods and services they sell to generate profits. Whatever the circumstances, whether elections, recessions, or hurricanes, they simply find new ways to profit – they figure it out. Your money is not invested in a faceless, breathless stock market ticking away endlessly, rather you are invested in the creative, productive energy of people and companies all over the world.”
Equally as easy, and perhaps more dangerous, is to let the concern for our portfolios crowd out the bigger picture of our lives. Here are some words of wisdom from a Friday Brief Ryan wrote back in May of this year, “But take heart! At some point, the stock market will continue it’s upward trajectory. Until then, the best thing you can do is focus on what’s in your control: time with family, your saving, your giving, your budget, your performance at work. If worries about your portfolio or the economy are a distraction, give us a call.”
So what can we do if we find ourselves allowing our portfolios to occupy more of our valuable headspace than they are due? Recently, I wrote this piece offering some suggestions on things to do if the financial market’s misbehavior has you on edge. Or what if we find ourselves thinking that we need to take radical action because the short-term path ahead seems like a forgone conclusion? Here’s a Brief I wrote in June about the challenges of making investment decisions based on our predictions of the near future. I hope you’ll find these helpful as you navigate the current investment environment.
I’ll close with some sage advice from our neighbor, the beloved Rialto movie theater…
And perhaps most importantly, please feel free to reach out to us at Beacon if you have questions or are feeling concerned. We’re here to help.
Hope you have a great weekend!
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