By George Seay
As coronavirus fears mount, and as the US stock market continues its enormous volatility to the upside and downside, both, Americans and specifically investors should focus on the long term. We are undoubtedly in for at least several months of economic, social, and health hits from the virus, and fears appear likely to mount further. A key thing to watch is when cases outside of China plateau and decline, as they already have in China. This event will likely signal most, if not all of the damage to the global markets and economies will have occurred by then. While we don’t know the timing of this event (Weeks? Months? Over a year? Impossible to guess accurately), we do know it will occur, if the historical accounts of previous pandemics are any guide. It would be wise to steel resolve now, to meet and confront future fears, doubts, and uncertainties to come. Prepare for additional losses in the markets, and remain resolute in the truism that when prices of securities fall, as long as an investor has years of investment yet to come, that significant falls always provide an opportunity to invest at more attractive prices. Additionally, investors should assess their current investment portfolios, and reconfirm their allocations to stocks, bonds, and alternatives to stocks and bonds precisely meet their goals and wishes. Furthermore, investors should keep in mind stocks have not even reached a bear market yet (defined as a 20% fall from highest prices), and are still quite positive from the beginning prices of 2019. It would take a 25%+ fall from recent highs, only a few weeks back, to erase the gains of last year and January of this year. In the grand scheme of things, the current fall is a far cry from prior corrections (57% from 2007-2009, 45% from 2000-2002, 40%+ in the mid-70s). We haven’t even corrected 15% yet.
When I graduated from high school in 1985, my parents gave me a framed copy of Rudyard Kipling’s poem “If”. I did not have the wisdom to appreciate the gift at the time, but as age has (hopefully) broadened my capacity for reflection, I am struck by the far-sighted wisdom of Kipling’s piece. I cited it in a graduation speech to University of Texas business school students in 2011. I commend it to your review at this time, and again in the months to come, if things get markedly worse/scarier. Enjoy. I welcome your questions and discussion of current events as we live through them.
If—
Rudyard Kipling – 1865-1936
If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or, being lied about, don’t deal in lies,
Or, being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise;
If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim;
If you can meet with triumph and disaster
And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to broken,
And stoop and build ’em up with wornout tools;
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: “Hold on”;
If you can talk with crowds and keep your virtue,
Or walk with kings—nor lose the common touch;
If neither foes nor loving friends can hurt you;
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run—
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!
