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It is often said that stock markets climb a wall of worry. This makes sense, since historically the market has gone up BUT there always seems to be something to worry about.
2021 is no exception. Year-to-date (through September), the S&P 500 is up about 15%. Strong stock performance has occurred despite the Delta variant, extreme political partisanship, debt and inflation concerns.
Investors worry about volatility, and we even worry when there isn’t volatility, such as in 2017. Absence of volatility may make us concerned about complacency or what we might be missing. In other words, there is always a reason for investors to worry about something.
Always A Reason To Worry
Worry is an interesting concept. Present, current worries trump anything in the past because we are living and working through it in real time. The uncertainty and anxiety are felt today. This may cause us to overweight current concerns and result in a myopic, rather than long-term, view of the future. However, for long-term investors, it is advantageous to maintain a long-term perspective.
Concerns – Past & Future
What did investors worry about in 2019? How about 2018? The stock markets were negative in 2018, so we probably worried a lot. But we can’t remember. That is because worries tend to work themselves out. We adapt and adjust to our changing circumstances, especially the bad ones.
What will we worry about next month or next year? It could be a continuation of present concerns, or it could be something entirely different. But it will be something!
Not Worth The Worry
In my experience, I have seen that investors who focus on the “worry of the day” experience greater stress and are more likely to make an unwise investment decision. Worrying is part of the markets. But it’s not worth the psychological or financial cost to dwell on these worries.
Ideally, you should be “delegating” your market worries to your trusted financial advisor. One of my greatest values is to help you know what is worthy of your attention and concern and what should be ignored.
Related: Markets: Up and Down, Not Up and Up