With summer fading in such a strange year, we find ourselves revisiting old memories. This will date me, but I’m thinking about the summer thrills we used to enjoy at places like Omaha’s Peony Park or Lake Okoboji’s Arnolds Park.
Part of the fun of a thrill ride is the anticipation. There’s a story and a rhythm to each ride. On a coaster, you make the climb—with a thunk-thunk-thunk on a lot of those “classic” rides!—and you can see the drop coming. Although you won’t know what they feel like until you get there, you can see the curves ahead.
And it’s all fleeting. The climb may feel like it takes forever, the terror of the drop may flash your life before your eyes… but you don’t go up and up forever, and you don’t fall down and down forever.
Sound familiar? Clients, you’ve heard us say this exact thing as a reminder about the markets.
Part of this lesson could use more attention, though: the ride can just be a ride when we know where we are on it.
When investors enjoy the climb of a hot stock, some mistakenly rush to throw everything they have at it, not recognizing that they are already near the peak: that thing will not go up and up forever. Nothing does. (Incidentally, this exuberant behavior can contribute to bubbles.)
Likewise, some get the itch to sell out when a stock cools off—but things may just be down for now and not down forever.
We don’t have a crystal ball, and we don’t have a map, but we know there are rhythms and cycles. What pain could we save ourselves by using a little perspective?
Where are we on the ride?
Clients, we’re here to help make sense of your plans and planning. Call or email when you’re ready for us.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
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