Convergence of Events

The opening sentence of A Tale of Two Cities, a historical novel by Charles Dickens, that was set in London and Paris before and during the French Revolution, seems to aptly apply to today as it did during those arduous times:

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”

With the increasing speed of (mis)information and (fake)news, it seems that we are in the best of times and the worst of times.

As Americans, we enjoy a level of prosperity, quality of life and freedom that in many ways makes us the envy of the world.

Here are a few:

• Biotechnology advances has enabled pharmaceutical companies to produce an increasing array of wonder drugs to improve and extend our lives.
• Computer technology has given us a whole new way to view and explore our lives and the world, as we could have only dreamed of only a few short years ago.
• We can travel around the world with ease and will soon travel our neighborhoods in autonomous automobiles using renewable energy resources.

Life is good … Right?

Yet, a convergence of events has created a sense of uncertainty and instability, which may have its roots in:

• A Partial Government Shutdown (due to promised political posturing)
• Federal Reserve Bank interest rate hikes (based on data, not emotion)
• Tariffs (with China and other bilateral unresolved negotiations)
• Electoral interference (spread by bad actors, both foreign and domestic)
• A Congress divided along political lines and seemingly irreconcilable ideologies
• BREXIT with a possible No Deal Exit (and its effect on European unity)
• Cyber security breaches (with increasing frequency and severity)

These and other factors have converged to create high volatility in the investment markets, fueled by algorithms of High Frequency Traders. With talk of slowing US and global growth, it seems inevitable that there may be a looming recession around the corner.

Panic or Patience?

Taking a break from watching CNN, FOX, CNBC, Bloomberg, BBC, MSNBC and other mainstream media, I turned on ESPN (the Entertainment Sports Programming Network). The program I watched was called Panic or Patience? It featured commentators who discussed a perceived issue affecting the performance and standings of NFL teams. At the conclusion of the analysis, the moderator posed the question: Panic or Patience?

The same may be asked about the external events you perceive which may affect your personal financial security at this moment in time.

Do you Panic or have Patience?

Plan!

A third “P” word worthy of consideration is: Planning.  As a Certified Financial Planner, I believe in the process of financial and life planning. Having clear goals and a plan to achieve them is comforting during turbulent times.

As individual investors, we stand little chance competing with Institutions and High Frequency Traders. In my view, the best way to weather political and economic storms is to have a plan that is customized to your needs and circumstances.

I believe a plan gives an individual the best chance of long-term success. A part of an investment plan is to maintain adequate cash reserves to survive volatile times without affecting lifestyle.

Included in a well thought out plan:

• Asset Allocation
• Diversified
• Risk Tolerance
• Time Horizon
• Periodic Review

When was the last time you reviewed your plan? Contact me to review your financial and investment plan. Click here to schedule a meeting.