Feeling Investment Grumpy? It’s OK.

October 5, 2016 - John Osbon (3 mins to read)

The popular press and social media are perfectly designed to tell us why we should be deeply scared about the future. Gloom and despair lurk around every corner.  According to these folks we are not just talking about a wall of worry; there’s a Grand Canyon of disaster waiting for us just ahead. It’s easy to feel uneasy. If that’s where you are, you’re not alone. But it doesn’t have to be that way.

Four reasons to be nervous, jittery and indecisive

As a major consumer of news and information, I’m living in the right century. We can now take the pulse of the investment world at 6am daily with stories in 3 major US newspapers, plus London and Tokyo. Throw in Bloomberg, BBC News and Google News and we can be extremely well informed by 630am. I find it to be a fascinating way to start each day.newspaper-changes

Because good news doesn’t sell newspapers or news site clicks, the news I see every morning is dominated by tragic stories and pessimistic predictions. Current worries and warnings seem to rise from four main areas:

  • Rising interest rates
  • High valuations
  • End of the business cycle
  • The election!!!!

Are these on your radar? If not, maybe you’re watching the crisis in Syria, the national debt, or more local issues. There’s plenty of gloom to go around.

Take a deep breath…

Times like these demand some perspective. As an investor you have faced uncertain and daunting times before. Remember Brexit, the Fiscal Cliff, Y2K, the dot-com bubble, $100 oil, $30 oil? Though the forecasts were dire, we survived and moved forward. Even the Great Recession is in the rearview mirror. October 2016 is the same ugly intruder, just wearing a different costume.

So what can you do about the threats and tribulations du jour?

First, take a deep and skeptical breath. Forecasts are exactly that. Those seeking to predict the future tend to be significantly off the mark. And even if the events are predicted correctly, their projected impacts on investment values rarely are. Chances are, the worries that dominate the headlines today will be all but forgotten within a few months. No wonder there are so many jokes about forecasters.

Second, take a quick reality scan by asking: Is it in the price? Markets do react to news and projections, but rarely discount the same information twice. If you are reading about a big news story, chances are good that markets have already adjusted prices accordingly.

Third, talk it out. If you really think there is something going on in the news that puts you at undue risk, call your advisor immediately and ask for a face-to-face meeting. Questions to discuss would be 1) Why is my portfolio invested the way it is? 2) Is my portfolio unique and personal to my goals, needs, fears and wants? 3) What would prompt you (the advisor) to change something?

Sleep well at night

Take these three steps and check the quality of your sleep. Restful, uninterrupted sleep is a great portfolio fit indicator. On the other hand, if you are waking up at night or having trouble falling asleep because you’re dwelling on investment issues, go back and meet with your advisor again. Repeat until you’re sure you have it right.

We know the markets will move up and down in the future. That’s normal and necessary, no matter what happens in the news. Especially in the election. On November 9th we will have a new President. For the 45th time. We will be OK.

John Osbon – josbon@osboncapital.com

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