facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause

Why bad times now could mean good times ahead

On the afternoon of January 6, I took my vehicle in for routine service. I was the only person in the customer lounge, so I changed the television to the business channel.

Suddenly, the business channel changed too, from regular programming to breaking news. And like so many others, I was appalled to see the Capitol being overrun by protesters.

I mention that I was watching the business channel because, throughout the live footage of rioting, it continued to scroll stock prices across the bottom of the screen. And I saw plenty of green arrows indicating that stocks were rising.

Current events didn’t knock the market off its upward trend. Since that day, I’ve often been asked how investments could be positive on a day that will likely be considered one of the largest blemishes in our nation’s history.

Generally speaking, the investment world tends to be forward looking rather than responding to the moment. From a financial perspective, these are difficult times for many households. The pandemic has changed the daily lives of virtually everyone. Far too many have lost a loved one to this awful virus.

However, with the vaccines beginning to be distributed and stimulus checks hitting bank accounts, many people are looking ahead with a sense of optimism. And that definitely includes investors.

Many experts believe that the vaccines provide the best impetus for boosting the economy. But whether it’s stimulus money or vaccines, at the end of the day investors are anticipating that 2021 will bring better times in spite of the pandemic.

Periodically, there are events that immediately change the trajectory of the investment world. The terrorist attacks on 9/11 are an example. But remember, investments aren’t so much affected by what’s happening as they are by what people believe is s going to happen. The unexpected can occur in everyday life, but it shouldn’t derail anyone’s long-term outlook.

I also believe to a certain degree, that as a society, we are no longer surprised by the violence of rioters. Peaceful protests are fine as long as they remain peaceful. But that’s not always the case. 

We have seen destructive riots throughout the country much of 2019 and 2020. And yet, ultimately, both years turned out to be pretty decent for investors. Perhaps we’ve become numb to violence and are no longer shocked by the awful behavior some of our citizens have displayed.

I would like to remind readers that, although there is no guarantee that history will repeat itself, we could learn a lot from what has happened in the past. Going back to the dark days of World War II, during the first three years of our involvement, when the outcome was still uncertain, the stock market was up each year.

That’s primarily because investors were looking down the road with a sense of optimism that somehow, someway, we would persevere as a nation. In spite of our nation’s troubles and divisiveness, I believe there is an underlying sense that the future remains bright. And a bright future means there are opportunities for investors.

Whether you look at the future through a blue or a red prism, or just with your own eyes, I suspect most believe 2021 will be far better than 2020. And I certainly hope so.

Know Someone?

E-mail your questions to kenmorris@lifetimeplanning.com

 Ken is a registered representative of LPL Financial. Securities and financial planning offered through LPL, a Registered Investment Advisor, member FINRA/SIPC. Ken is Vice-President of the Society for Lifetime Planning in Troy. All opinions expressed are those of Ken Morris. LPL and Society for Lifetime Planning are independent companies. Investing involves risk including loss of principal. No strategy assures success or protects against loss.