market history

Are We Going to Be Ok?

I drove to the office Friday morning after the state of Georgia mandated shelter in place (my business allows me to be essential). My commute is only 3 miles, but on a normal day it can take fifteen minutes to get out of my neighborhood and to my Marietta Square office. As I turned onto the main road, my first thought was this feels like Christmas morning and I am looking for batteries! Traffic was nonexistent. The usually busy Starbucks on the corner was closed. As I rounded the corner on Church Street, I saw ample parking. I pulled into my parking spot with ease versus the usual having to back in with many cars around. Then it dawned on me. This is not a holiday. This is real. There are real people going without jobs. Many businesses may not reopen. How we conduct business and interact with others will change forever. Is shutting down the entire economy for more than a few weeks worth the risk of crippling it? Are we going to take a recession and make it a depression? Are we going to get the Dow Jones back to 29,000 in the next twelve months? Are we going to be ok? No one knows these answers yet, but the market history is in our favor.

I have lived long enough that regardless of the precarious situation I find myself in, I am more relaxed than I would have been fifteen years ago. I suppose I learned a lot during the great financial crisis in 2008, my aviation background and being strong in my faith. The financial crisis taught me that greed is a bad thing. In personal finance, you have to be defensive first, building up savings for job loss or other catastrophic events, so that your investments can stay focused long-term in the middle of the financial storm. Twelve years of being a commercial airline pilot has helped me manage risk and resources. In the middle of the emergency, make sure the plane keeps flying. Don’t crash over a burnt-out light bulb. Isaiah 43:1 says ”Don’t fear, for I have redeemed you; you are mine.” God is commanding me not to fear. I belong to Him. This gives me the confidence each day to lead. Am I perfect? Absolutely not, but I belong to Him who is. I find this very calming.

We are going to be fine. How do I know this? I know that the end of the world only happens once, so there is really no reason to prepare for that. I do know that of any country, American entrepreneurship and our free markets are resilient in times of crisis. Social media has built a new generation of whiners but there is still a mass majority that will simply get to work and get this country running again. This will be in spite of politicians, not because of them. I do know that when you look at a long-term Dow Jones chart, there are wars, pandemics, financial defaults and other scary situations, but businesses have found ways to make it work. This Dow historical chart is a good example of how it all ends up ok as long as we stay levelheaded in portfolio management. Easy to say in hindsight, but a reminder that we should always have cash available outside of markets, understand that every crisis is the same, but with different headlines and sometimes we have to do nothing. And I do realize that doing nothing is the hardest to do when the financial world seems to be spinning faster.

There are many reasons to be fearful right now. Many people are angry, sad and depressed about their current situations because of COVID-19. It is ok to have emotions but remember that this is only a temporary circumstance. You can do this!

Casey T Smith

Posted 4/13/2020

By Published On: April 13, 2020

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