In the summer of 2016, I embarked on that great American activity, the road trip. A friend relocating from Seattle to Washington D.C. asked me to meet in Denver for the second leg of her trip. We would eventually travel to Cincinnati together.
At first, the idea of driving a few thousand miles in some of the most remote parts of the country seemed daunting. But by doing my homework, I was able to list a few interesting places to go along the way — provided we decided to take a few backroads.
That’s how I got an up-close look at some ranches in Wyoming. And got to see the Black Forest Hills in South Dakota. And one of the most stark, yet stunning places on earth — the Badlands.
It wasn’t all landscapes either. Man-made attractions included the ambitious Mount Rushmore monument (it was nice of Teddy Roosevelt to let a few other famous American presidents share the mountainside). And visiting another friend in Omaha brought with it a trip to one of the top zoos in the country.
But for all those interesting things, there was a lot of space in-between. And that’s OK. If investing has taught me anything, it’s that sometimes there isn’t much to mark your journey, but that over time, you’ll go great distances and see great things.
Right now, this market is struggling. And rightly so. While stocks are now in correction territory for the second time this year, we had a great run up in the 15 months from November 2016 to February of this year. We barely had any down days, but we likewise had few days in that period where the markets moved 1 percent.
At the time, numerous commentators noted how eerily calm it was. And that it wouldn’t last. We’re in a different place today, where every market decline since 2012 has been warned as the time this market will finally die out.
Yet bull markets don’t die of old age. They die in a euphoric stupor. The tech bubble told us this time was different. The real estate bubble died on the hillside of “real estate prices have never declined nationally at the same time before.” How this current bull market dies remains to be seen.
Maybe the general economy will overheat, and we’ll start hearing claims about how the economy can get down to a 2.5 percent unemployment rate. If that’s the case, the next big market downturn is still 12-18 months away. That’s time enough for another rally back to new highs and another 10 percent pullback in the interim.
And if the 2018 World Series is any guide, a 7th inning stretch may be less than halfway through the game. With a market that spent 2009-2015 with zero percent interest rates, which are only now starting to normalize, it’s possible that this market still has a few years left in it, crazy as that may sound.
So I’m not sweating this selloff. Sure, I hate seeing my existing holdings drop just as much as anyone else. But over time, they’ll come back. And a market decline creates new opportunities.
Rome wasn’t built in a day, and it wasn’t destroyed in a day either. The market has some tough days ahead, but it also looks a lot like a run-of-the-mill correction—the kind of pullback we should have had in 2016 and 2017 but didn’t. We’ll see how it ends, but in the meantime, there are plenty of stocks down even further that still look like great prospects ahead.
Investing is a journey where time is your friend. There’s an open road ahead. But you have to take advantage of it. One of the saddest statistics I can cite is the fact that the number of individuals owning stocks peaked with the tech bubble in 2000.
Sure, they missed the housing bubble and the havoc that wreaked on the overall stock market. But they also missed the chance to be made whole by the market as well. Those are folks who got 10 miles from home and decided they didn’t want to see all the world had to offer.
We live in fantastic times. Despite the pessimism everywhere (not just in an election year), it’s one of the most peaceful times in human history. We’re on the verge of technological innovations that will radicalize the nature of work with tools like robotics and artificial intelligence. That’s why it’s more important than ever to invest—because earning an income will be more challenging in the years ahead as a result.
So keep on keepin’ on! And take advantage of the sale the market is throwing right now. If you liked a stock a few months back but wanted to wait until it had fallen a bit—now’s your chance. Don’t fret the recent performance of stocks. If a company looked great (and still does operationally), then get that 10, 20, or 30 percent discount that the market’s throwing out now.
We can’t go back to the early days of 2009 when just about every stock today was trading at a fraction of what they’re going for now. But there are plenty of bargains worth buying today, even if the thought is uncomfortable. But remember, you can’t succeed in your investment journey if you don’t take any risks. Use corrections like these as a buying opportunity.
Andrew Packer is a Senior Financial Editor with Newsmax Media. He currently writes the Insider Hotline investment advisory, serves as investment director for the Financial Braintrust, and writes the monthly newsletter Crisis Point Investor.
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