January 7, 2021
Fortunately, I was preoccupied most of yesterday and didn't have access to news so I was pretty much aware of the riot taking place within the halls of congress. Fortunately, when it comes to investments and investing, ignorance is sometimes an advantage and a blessing. Nevertheless, some thoughts.
Of course, many watched it with a good deal of concern – possibly watching for hours on end. Thus, I’m taking this occasion to reach out and to assure you that the world is not coming to an end, either politically or financially. Markets closed after yesterday’s events and today at record highs. Read nothing further into this than a simple fact. No doubt, in the coming days, responding to events markets will fluctuate both positively and negatively – this is their nature. These fluctuations or “risk” is what you are compensated for by the returns that equity markets deliver over time.
If protests that burned down parts of major cities hasn’t brought about Armageddon, a “protestor,” shoes up on Nancy Pelosi’s desk, stealing items from her office (but he left a quarter for the envelope he appropriated) won’t either. So here’s some takeaways:
If we thought the craziness would end in 2020 – I guess we were wrong.
We’ve seen all kinds of civil unrest the last few years, brought on by the pandemic, the death of George Floyd, social/political movements and now the election.
Power has shifted in Washington which some view as a good thing and for others.. well.. not so much. Nevertheless, life moves on and as we discussed on one of our broadcasts, the markets could really care less over time who the occupant of the White House was.
Despite the optics, the U.S. market closed at record highs.
The majorities in both branches of Congress are razor-thin, which means it’s highly unlikely we’ll see major changes over the next two years. But, even if we do, companies and markets have a way to adjust. The pandemic has been awful to mom and pop restaurants and many small businesses. But it’s been a blessing to Kroger, Amazon, Netflix, P&G and others. You don’t have any family restaurants in your portfolio. But, you do own the other companies I just mentioned.
For those old enough to remember, think back to 1968. We’ve been here before and likely will be back again. Freedom is messy and is often abused by those who exercise it.
It’s easy for me to sit back and remain calm. I get that. But if we are to think logically, we must recognize our ability to rise above. Turmoil is the norm, not the exception.
I offer one piece of advice (which my clients and readers know well): stay informed but don’t overwhelm yourself with news. If you can, read the news rather than watching it. TV is all about feeding your emotions. Watching the same scene over and over isn’t informative but certainly raises the emotional stress level. Read a good book, listen to some music, dine and drink well, take a break and watch some entertainment and last, but not least, tune in to “Cocktails With Fred” to learn how to enjoy life and investing with knowledge and confidence.
I’ve had a few calls already and I want to reiterate, as in the past, I’m here for you. You all have both my office and cell phone numbers. Please feel free to call me seven days a week – including evenings. Like a pilot flying a commercial jetliner through turbulence, I’ve been through this many times before and I know and understand how those, perhaps less experienced can be upset by both political and financial turbulence. I’m both experienced and trained for this so please call me if you feel the need or even if you would just like to talk, vent or express your feelings of the moment. This is what I’m here for!
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Frederick C Taylor
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