I started investing in 1994 after my grandparents bought me a share of stock for my 14th birthday. At that time the Dow Jones Industrial Average (DJIA) was valued at 3,829.73. By the lowest point of the dot.com bubble burst on October 7th, 2002 it was valued at 7,422.84. We lost companies like Pets.com and eToys.com, but by January 1st, 2004 the value was back up to 10,453.92.
I became a Financial Advisor on October 4th, 2004. The economy was strong and real estate was all the craze. One of the biggest objections I received to my investment recommendations was that he/she/they’d prefer to invest in real estate.
By October 7th, 2007 the DJIA was valued at 14,164.53. Then came The Financial Crisis. At its low point of March 2009, the Dow reached 6,469.95. This was known as "the lost decade" in the U.S. stock market. The real estate market fared even worse resulting in an unprecedented number of foreclosures and short sales by the time it was all over. Since this time we’ve seen companies emerge stronger and we’ve had a pretty great run in the stock market. From the low point of March 6, 2009, the DJIA has more than quadrupled in value.
Last month we saw the inversion of the yield curve resulting in a decrease in the market of 2.96% in one day. Typically longer-term bonds pay higher interest rates than shorter-term bonds…unless we’re inverted. The term recession is being thrown around by the talking heads. None of us knows exactly what’s going to happen, but I personally believe the question isn’t IF we’re going to have a recession-it’s WHEN. I’m also preparing for continued market volatility.
This, of course, isn’t a surprise if you’re a Merino Wealth client. I’ve been talking about this for a while and we might have even put a plan in place for this a year ago! Rest assured that we’re keeping an eye on things and are always happy to answer questions or just talk through your concerns (just reply to this e-mail if you’d like to chat). Remember this isn’t my first rodeo.
The views expressed today are my own and do not necessarily represent the views of my broker/dealer, The Investment Center, Inc. or my Registered Investment Advisor, IC Advisory Services, Inc.
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