“It was 20 years ago today…”
Oops, I meant it was 15 years ago yesterday.
Many are familiar with the opening line of the Beatles’ Sargent Peppers Lonely Hearts Club Band, both the song and album namesake from back in the fertile music decade of the 60’s.
How many investors, though, remember the mood permeating the financial markets in March of 2009? For those having trouble recalling, look at just one of the headlines from back then:
I remember that period very clearly. The long, drawn-out market slide that precipitated the Great Financial Crisis in 2008 finally found its footing on March 9th of 2009 after the S&P 500 had been cut in half.
As an advisor, it was very difficult to remind clients to stay the course and remember when they were going to need to use their invested money; for most, it would be many years in the future. Although I counseled that the most likely outcome was a rebound soon, I can recall one of my clients pulled everything on the exact day of the bottom. Perfect timing indeed.
The next day, CNBC’s legendary Mark Haines called the bottom.
That was a very bold moment in such a gloomy environment, amidst feelings shared far and wide that we were witnessing the second coming of the Great Depression.
As many of our readers know, we keep a close eye on the historical influence of the Presidential Cycle on the markets. We’re in year 1 of a new (or more accurately version 2.0) of a new administration. History shows that the first 100 days of a new administration tend to be volatile, as trial ballons are floated to take the temperature of the legislators and their constituents.
One might think that 2025’s version is a completely different animal. Actually, I see a lot of similarities to 2009 and Barack Obama’s historic victory over John McCain. I distinctly recall comments from some of my clients, that “this is dangerous for our democracy.”
Sound familiar?
I learned long ago to sidestep political discussion and to not base investments strategies on politics.
Today’s markets seem to be conjuring up the uncertainty of 2009, hoping for a reasonable compromise and solution while the trials ballons are in flight. Yet none have been forthcoming.
When will these compromises arrive?
It is difficult to tell when the administration will hit the brakes. I do feel confident that when the 100 days end and we get into the first quarter earnings season, the focus will shift from the geo-politics dominating today’s headlines to the most important determinant of stock prices, corporate earnings.
I’ll get back to writing about stock market technicals and where things stand from that perspective soon. Sometimes, however, a simple reminder about keeping a long-term view with investments feels needed to help protect investors from making a rash decision like the one that client made at the last major stock market low.
Remember where you were when you first heard “It was twenty years ago today” and instead keep in mind that for a stock market moment none of us should forget, it was actually just 15 years ago yesterday.
