Stock Market Panic

Market Panic: December 2018 edition

December has been a bad month for the markets worldwide. This bull market we are in is being shaken and people are worried. I’ve had a few panic calls from clients, but even if you didn’t pick up the phone I can sense you are nervous.

Here are the facts:

  • We have low unemployment
  • We have low inflation
  • We have low interest rates
  • We have a growing economy.

Here are the worries:

  • Trade war with China
  • Looming recession
  • Rising interest rates
  • Government shutdown
  • Mueller Investigation
  • President Trump putting foot in his mouth
  • Border security
  • Terrorist attacks
  • and finally (for my vegetarian clients) … romaine lettuce contamination.

If you concentrate on the worries blasted all over the news, you might be a little freaked out.

But if you turned off the news, you’d realize:

  • You have a job
  • You probably earned more money this year
  • Your company is hiring
  • Your mortgage rate is low
  • Your home has appreciated in value
  • and you’re generally happy.

Why is everyone so worried? Why do people think a recession is looming? I don’t have that answer, but just because we haven’t a recession in ten years doesn’t make it any more likely.

It’s okay to feel nervous and its okay to ask your advisor what’s going on with your accounts, but making a change because of non-quantifiable worries vs. quantifiable facts is likely going to be a mistake.

I feel this market is massively oversold and is now trading at a lower valuation than its 65 year average. International and emerging markets are even more disproportionately undervalued in my opinion.

I have the only store in the world where when my inventory goes on sale no one wants to buy … everyone wants to wait for full price to come back!

Take care, have a great Christmas, turn off the news, enjoy your family.

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