THIS TOO SHALL PASS

October 31, 2023

We recently had our annual Economic Update, and the theme was Three Bear Markets in Fifty years. To summarize here are some take aways from my presentation:

In times of great market declines, many investors will say: “This Time is Different.” Certainly these times of crises whether they are economic, geopolitical or both are scary from an emotional perspective, and test our mettle as long term investors.

The stories change, but the feeling is still the same.

I like to repeat that in my over 37 years as a financial advisor: “This Too Shall Pass” is the mantra to remind ourselves when we are in these uncertain times that feel like “This time is Different”.

Human behavior/nature tends to forget that “This too shall pass”. This is especially true in the short to intermediate term. Prices in that time frame will often appear to be responding to the news of the day, or “apocalypse dujour.”

Remember: In the long run, market prices of the companies we invest in are a direct function of their future earnings, dividends, and cash flows.

From the crises of the 70s, 80s, 90s, 2000s to today, we have seen prices go up, not down. The trendline is positive. The market cannot be timed. We are always rewarded for our resilience to not do the wrong thing at the wrong time, but by staying the course, and even buying when everything goes on sale!  Yes, this too shall pass.