The economic outlook is grim, according to the media — as usual. Here are just a few gloomy and foreboding headlines from published articles over the years that reflect this pessimistic outlook:
- “Bank Failures, Unemployment and Economic Collapse”
- “The Death of Equities” – Cover of Businessweek magazine,
- “The Great Stock Illusion: Why the Stock Market Has Peaked” – Forbes
These headlines are nothing new; they have been the norm for more than a century. The first article listed above, titled “Bank Failures, Unemployment and Economic Collapse,” appeared in the media in 1857 — more than 150 years ago! The ‘Death of Equities was on the cover of Businessweek magazine in August 1979) and the last headline was in Forbes in 1982!
It’s no wonder the public is perpetually concerned about the economy and that people resist investing or move funds out of markets. And it’s no wonder that Americans are pessimistic about their futures.
In a March 2023 Wall Street Journal–NORC Poll, a majority of Americans showed pervasive pessimism about the U.S.’s current financial state — and growing skepticism that things will improve in the future. Four out of five people surveyed said the economy is doing “not so good” or “poor.” Nearly half, according to The Wall Street Journal, expect it will get worse in the next year. Most of these answers were recorded even before the second-largest bank collapse in U.S. history.
What About “Balanced” Journalism?
Now, I’m not saying that negative events never happen; they do, but often, the media paints only the worst-case scenario and leaves out the best-case scenario.
For example, since 1979, when the second headline listed above appeared on the cover of Businessweek, the Dow Jones Industrial Average has moved from 885 to just over 33,000 — that’s a return of 3,654 percent. An amount of $10,000 invested in 1979 would be worth just over $3.8 million today! That reality certainly isn’t congruent with the doomsday economic picture the media paints for us.
One interesting fact to note about the gloom-and-doom articles the media publish is that the challenges they discuss seem to remain the same, ranging from pandemics to bank failures. It’s difficult to maintain perspective during a crisis anyway, and it’s even more difficult when we are inundated with prognosticators who tell us the sky is falling. The barrage of negative media has only escalated now that we have instant media and social media.
Practical Tips for Weathering Economic Storms
Another topic we see discussed often is inflation. And yes, inflation is quite real and quite detrimental to our financial well-being. Yet the articles published about inflation tend to do nothing more than present alarming statistics about how inflation is eating away our money. Most of these articles fail to offer strategies for navigating inflation.
For example, as prices continue to go up, it’s critical to maintain your standard of living in accordance with your income and portfolio, to at least keep pace with inflation. Our experienced team of advisors guides our clients through economic storms like inflation. We keep your personal vision in sight at all times while using your tailored financial plan to guide you through each situation.
Here are some additional strategies you can employ to potentially increase your chances of long-term success, despite what’s going on around us:
- Have enough cash on hand to ride out any temporary volatility
- Maintain a diversified
- If you can and if appropriate, add to quality investments when prices
- Have a plan and stick with
- Keep in touch with your advisory team as we evaluate and update your plan
- Work with experienced professionals who can help provide guidance
Crises will happen, and markets will be volatile. There have always been — and most likely always will be — reasons to panic and or avoid investing. Yet with a disciplined approach, not only can you manage these situations, but you can likely benefit from them. There are potential pitfalls in building wealth today, although we believe there are also tremendous opportunities.
And, while the specific events change over time, the ideal reactions to them are typically the same, as are the opportunities. (For example, history has proven that it is often detrimental to long-term success, to pull out of the market when the stock market experiences a downturn. When appropriate, we typically tell clients to avoid knee-jerk reactions to market fluctuations.)
We recognize that, although this is simple in theory, it is difficult in practice. That’s why we are here for you.
Our team has more than 250 years of combined experience with all kinds of market and economic conditions. We will guide you through whatever comes your way. Please reach out if you have questions or concerns or if we can otherwise be of service. Your vision is our priority, and your financial well-being is our passion. We look forward to connecting with you.
Randy Carver, CRPC®, CDFA®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Carver Financial Services, Inc., was established in 1990 with the vision of making people’s lives better — clients, team and community. With this mission, Carver Financial Services has grown to be one of the largest independent financial services offices in the country, managing $2.3 billion in assets for clients globally, as of March 2023. You can reach Randy directly at firstname.lastname@example.org and in the office at (440) 974-0808.
The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Carver Financial Services and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Holding stocks for the long-term does not ensure a profitable outcome. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification. The hypothetical example is for illustration purposes only and does not represent an actual investment. Actual investor results will vary. Past performance does not guarantee future results.