There will always be people who prefer to look on the dark side of situations, believing the world is about to end. Chicken Little saw danger everywhere, each sign posing imminent destruction. Then there was Pollyanna who was excessively optimistic about everything, positive to a fault.
This same attitude of deep concern or exuberant enthusiasm voiced by economists and analysts gets old after awhile when the promised debacle or economic paradise doesn’t materialize on schedule…or ever.
The most recent example of gloom and doom in the markets has been the unimaginable horror of Britain’s exit from the European Union after 40 years of membership. Investors immediately responded with fear of the unknown, or with the expectation that the markets would fall…which they did…only to exceed their pre-Brexit performance levels a few days later.
Before Brexit there was the crisis with Puerto Rico being unable to pay back its debts; before that there was the high price of a barrel of oil, jumping to about $140…though today it’s under $50. Before that there was the housing boom and bust, and before that there was… Each of these events was regarded by many as the End of Life as We Know It.
You must remember that as odd as it may seem, the lure of lucre creates two primary emotions: fear and greed. Fear, because no one wants to lose their hard-earned gains; and greed, because everyone wants to grab as much cash as possible while the treasure gates are open.
Believing that recession is just around the corner when some bad news hits the fan is the game that Chicken Little plays best. There are really only four threats to wealth creation, and that’s monetary policy, tax policy, trade policy, and burdensome spending and regulation. When these four factors don’t overly interfere with the free market, prosperity grows. When they interfere and confuse the market, it’s like jamming a stick in a bicycle’s spokes.
The important take-away is to base one’s decisions on facts, not fantasies. Synergy Advisor Portfolios’ forecasts always derive from a clear analysis of real data. We do not jump from lily pad to lily pad on the winds of hot news stories or the fanciful imaginations of What Could Be. We are strictly data-driven.
Because of the industry we’re in, and the tendency for human emotions to jump to extreme viewpoints, there may never be an end to the warnings of a falling sky…but by the same token, we count ourselves among those who keep our head when others have lost theirs, steadily minimizing risk and maximizing return, serving our clients in a calm and professional manner that builds their ever-growing financial success and wealth.