July 15


Glass Half Empty

When I ask people, “What do you think about the stock market?” The most common answer is: “Oh, man, I lost a fortune in 2001 and it was even worse in 2008.  The stock market is dangerous.”

It’s funny how human beings perceive the world.  We naturally remember the bad stuff and edit out the good stuff.  I guess we are hard-wired that way.

Yes.  The S & P 500 was down 12% in 2001 and 22% in 2002.  And yes, the S & P was down 36% in 2008.  I don’t want to minimize that. (Source: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html)

BUT, what about the other years since 2001?  Let’s take out 2001, 2002, and 2008 and look at the other years.

2003       UP          28%

2004       UP          10%

2005       UP          5%

2006       UP          15%

2007       UP          5%

2009       UP          26%

2010       UP          15%

2011       UP          15%

2012       UP          16%

2013        UP         32%

2014       UP          13%

2015       UP          1%

Why doesn’t anyone talk about 2003?  Or 2009?  Or 2013?????

Why do our minds automatically gravitate toward the down years?  I don’t know.  I’m not a behavioral psychologist.

So next time someone asks you, “What do you think about the stock market?” you need to say, “Man, I made a ton of money in 2003, 2004, 2006, 2009, 2010, 2011, 2012, 2013 and 2014.”

People will probably look at you funny.

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. Indexes are unmanaged portfolios and individuals cannot invest directly in an index.  Actual results will vary.

This communication is for informational purposes only and nothing herein should be construed as a solicitation, recommendation or an offer to buy or sell any securities or product, and does not constitute legal or tax advice. The information contained herein has been obtained from sources believed to be reliable but we do not guarantee accuracy or completeness. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel.

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