Today is a significant anniversary for the markets.
It was March 9, 2009, when stocks last traded at recession lows. After months of crushing declines, the Dow Jones Industrial Average closed at 6,547.05. At that point, the markets hadn’t traded that low since April 1997.
As for the S&P 500, it closed at 676.53 on March 9, 2009. That nadir represented the lowest level since September 1996.
Eight years later to the day, the Dow closed at 20,858.19 while the S&P 500 ended the session at 2,364.87.
That’s a gain of nearly 220% on the Dow, and 250% in the S&P 500.
The lesson here for investors is rather obvious: Out of the depth of darkness comes opportunity.
Indeed, when it comes to human behavior (as exemplified by the markets), keeping your head about you … and not panicking, no matter what the circumstances … is always the right tactic.
That’s not to say that you should buy and hold. Far from it.
But in 2009, when equity values had plunged so low, it was only courage and confidence in America and the desirability of her markets that preserved one’s sanity.
That is a lesson to keep with you while in the abyss, and during times of market euphoria.
The reason why is because both extremes never last.
So, staying rational, calm and managing your investments with the utmost focus and reason is the only way to really prevail.
And, if you can apply a little uncommon wisdom in your choices, you’ll likely discover you’ll also be that much better off.
As for uncommon wisdom, Afternoon Edition readers have certainly weighed in of late on two of our recent topics, "Obamacare Repeal/Replace: Good Changes, or Just ACA ‘Light’?," and "The CIA Can Spy on You with Your Phone, Your Car and Your TV."
Both prompted a torrent of interesting feedback. So while the topics are hot, I wanted to present a few intriguing responses.
On the House healthcare repeal/replace proposals, many thought the plan didn’t go near far enough.
Jack writes …
"Obamacare lite" … or worse. I have been very encouraged and supportive of the political and policy direction since January 20th, but this is a huge red flag. Extremely disappointing with Pres. Trump’s promises and Tom Prices’ knowledge of the ACA issues. Repeal now, then work on a new plan.
Ryan, McConnell and the Republicans have had 7 years to put a plan together, and apparently, all they’ve done is posture without substance. The necessity of a plan following repeal may well be the only way to get meaningful Congressional action. If the proposal presented 3.7.17 goes through, and the tax plan is equally anemic, this is an opportunity squandered and almost impossible to recreate. The Swamp will have prevailed.
Rich writes …
It appears to do nothing to bring down the costs of healthcare. We need to restore the power to the individual, with insurance for "big items," not for every doctor’s visit. So, this looks to me like just tinkering with the ACA; it will not "fix" anything. Get the government out of my healthcare!
Fred C. writes …
As far as I can see with this nonsense is they are keeping everything that adds to cost, keeping adults on parents’ insurance, doing away with exclusion of preexisting conditions and extending Medicaid at least until they get through the next election cycle.
Then, they are taking away everything that is in place to pay for the program. Taking away individual mandates, taxes on medical equipment manufacturers and taking away the employer mandate to cover their employees. The mess is just getting bigger.
Brad response: Most comments seem to feel that the House plan doesn’t go far enough, and basically is, as Sen. Rand Paul says, just "Obamacare lite." Still, there were comments that went in the opposite direction, pushing for a plan that was basically universal healthcare.
Those two polar opposite ideas (capitalism vs. socialism) are what you get when you try to create a government program that’s part entitlement, part free market … and generally unsatisfying to everyone.
As for the story on CIA spying, a lot of readers where rightly concerned.
|Image source: wikidot.com|
Robert F. writes …
All this does is confirm what should be obvious. No electronic communication is safe. The more "connected" one becomes, the more tracks one leaves and the more openings are created to compromise all privacy.
And Tom J. writes…
Almost scared to send this email as it may be used against me in the future. We’re heading down a dangerous road and our politicians are to blame. They intentionally divide the country over nonsense issues such as safe zones and transgender bathrooms. Meanwhile, our freedom and liberty is being eroded away at an unbelievable pace.
Brad response: I, too, am very disturbed by these spying revelations. I’m also perturbed at what I see as a lack of outrage in the nation over this issue.
There seems to be more angst about far less important social issues, as Tom J. points out, than the issue of government overreach and police state surveillance capabilities.
Indeed, on this issue, our apathy could ultimately be our most dangerous character trait.
Let’s keep the discussion going! If you’d like to weigh in on any of the recent issues we’ve covered in the Afternoon Edition, then I encourage you to do so. All you have to do is leave me a comment on our website or send me an e-mail.
The bull’s 8th birthday was a quiet affair as traders digested economic data, particularly where it comes to U.S. jobs. The broader markets pretty much played "pin the tail on the flat line," as they only closed fractionally higher across the board in Thursday’s trade. The Dow remains just below the 21,000 mark it hit last Wednesday.
• Yesterday’s red-hot ADP jobs data showed that U.S. employers hired 298,000 people in February, some 100,000 more than economists expected.
• Jobless claims up 20K, layoffs down 20%: The Labor Department today said jobless claims ticked up to 243,000, up 20,000 from the prior week. But layoffs fell 40% year-over-year, and 19% month-over-month, according to Challenger, Gray & Christmas, a global outplacement firm.
• 90% chance of a Fed hike: Tomorrow’s February employment report from the government is likely to seal the deal for a Fed rate hike to come out of next week’s meeting. And traders are betting that a hike is a near-certainty.
• Oil rout resumes: Oil slid 2% to close below $50 for the first time in 2017. This extends yesterday’s 5.4% loss after U.S. stockpiles came in four times higher than analysts expected.
• Eighth down day for gold: Since its Feb. 27 closing price of $1,258.80, the yellow metal has slid $55.60 as Fed rate-hike chatter has ramped up.
• Record household wealth: U.S. households saw their net worth gain $2 trillion in Q4 2016, bringing it to a record $92.8 trillion. Some $728 billion of that came from the late-year stock market rally.
Good luck and happy investing,
Uncommon Wisdom Daily