Good morning & happy Monday!
“We are big fans of fear, and in investing it is clearly better to be scared than sorry.”
– Seth Klarman
With Halloween being this Friday, I was thinking about things that are scary.
Now, we all have different things that scare us. As someone who enjoys adventure, I find enjoyment from rollercoasters, white water rafting, and hikes that start before the sun rises and end after the sun sets. For many of us, these would fall into the category of scary, for me it’s fun. I’m not often accused of being ‘normal.’ 😉
I was thinking about all the things that have happened in the world over the last few years and I’ve come to this conclusion … the world is a scary place!
In the 70 months since we started 2020, we’ve seen …
- The COVID-19 global pandemic where we thought humanity might be wiped out
- Russia invade Ukraine causing over a half million deaths and turmoil in the oil markets
- Hurricanes Helene & Milton slamming the US in 2024
- The 2023 Maui wildfires
- The October 7th attack by Hamas on Israel and the ensuing war in the Middle East
- The Baltimore Bridge collapse in 2024
- The Mpox “zombie virus” in Africa and the bird flu in the US
- School mass shootings
- China threatening Taiwan
- Tariffs that rocked the market earlier this year and are still grabbing some headlines
- Regional bank failures in 2023 and a few bank scares in the last few weeks
- China property crisis
- The largest level of inflation since the 1970s
- Rate increases and rate decreases and uncertainty around Federal Reserve policy
- A few contentious presidential elections with January 6th in the mix
- Mysterious UFOs flying over the skies of New Jersey last year (found out later to be a drone company)
- There’s probably a president over the last 5 years that you thought was a threat to the republic (Trump or Biden)
- One of the longest government shutdowns in US history in 2025 (remember that one 😉)
- A bear market in 2022 with the S&P 500 dropping 21% & NASDAQ losing over 33%
- GameStop meme frenzy in 2021
- FTX’s $8 billion dollar fraud with Sam Bankman-Fried ending up in jail and the ensuing cryptocurrency panics
- Boeing 737 MAX safety concerns following multiple overseas crashes
- US dropping a bunker bomb on Iran to handicap their nuclear program
I could go on, but I think you got the idea. This is a scary world we live in!
If we allowed it to get to us, we would just spend all day in bed. So many risks everywhere!
So why in the world would we invest in such a scary world?
When we changed our calendar to 2020 and started a new decade the S&P 500 had a value of 3,230.78. Today it is trading at roughly twice that level.
Despite all the risks in the world and all the risks of investing, those who tuned out the noise and stayed invested have been handsomely rewarded.
It was hard in 2020, and 2021, and 2022, and 2023, and 2024, and 2025. It will be hard in 2026, and 2027, and 2028, and every remaining year of your life.
There will be headlines that will make you think the world has gone crazy. There will be politicians who will say things that will scare the living daylights out of you. There will be world events that will shake you to your core.
In each one of these times, you will be tempted to think to yourself, “Maybe I should get out of my investments, at least for a little while until things settle down.” That little voice inside of your head is your enemy who is trying to sabotage your future. Don’t listen to that voice. Stay the course. Keep focused on your goals. Tune out the noise.
We invest in equities both IN SPITE OF their risk and BECAUSE of their risk. The reason we can get such incredible returns from equity investing is BECAUSE of the risk involved. If you could double your money over 5 years in a risk-free bank account, then sign me up. But since that is not an option, I will gladly trade some short-term drops in exchange for such tremendous growth opportunities. I invest IN SPITE OF short-term market movements.
Missing out on life changing investment growth scares me way more than a bad month or even a bad year in my investment accounts.
So, this Halloween remember: in a scary world, investing isn’t frightening – it can be beautifully rewarding and exceptionally profitable! 😊
Thank you for the amazing opportunity to serve you … I truly cherish it!
Make it a great week ahead.