Rough Market & An Awful Sentiment


Back when I worked on a trading desk (talking in the 90's) my buddies and I would get a kick out of saying stupid cliches and the one that would fit for today would be "Wall Street took it on the chin today." If you've been reading this site for a while you know I've been concerned about a bear market going back to May. There were a couple of false positives before then but for now, based on my interpretation of the 2% rule I think a bear market started in May, I realize the market went on to make a high later in the year but a bear starting in May looks to be part of a very slow rolling over and for now isn't wrong. If we bounce here and go rocketing past 3000 (for the S&P 500) then the May call will be wrong.

Regardless of what this is, you've been through worse. What ever your process is, all you need to do is stick to it. On Facebook I made the joke that today only matters if you're retiring today at 4pm and need to spend all your money at 6pm.

Even if this is the early innings of a legitimate bear market, you already know what will happen. The market will go down a lot, then it will stop going down maybe for no reason at all and then it will go back to a new high. The only variable is how long that all takes.

Humble Dollar had an article about Social Security that included the following quote;

But the 401(k) experiment has proven to be a failure. Perhaps it isn’t the plans themselves that failed. Rather, the failure lies with workers’ unwillingness to accept long-term responsibility for their own retirement.

That people might be unwilling to take on this responsibility is an awful sentiment. Joe Moglia (one of my favorite quotes coming) said that no one will care more about your retirement more than you. The importance of taking on this responsibility is important on many, many levels. There is psychic value in solving your own problems (to the extent you have a problem), parroting Moglia who is more motivated for you to have a positive outcome than you, good luck is often a product of hard work (I believe in this sentiment wholeheartedly), it is less likely you will feel regret when you give a maximum effort and there are probably other reasons.

I implore you to engage this if you have not already done so, doing nothing is of course an option but one that is likely to end badly. Realistically if you're reading this site you are already engaged but as a point I have made before, if you're reading this page you're very likely the relative or friend that people seek out for financial advice. Encourage people in your circle of influence to engage their retirement planning.