Thirty Years of Reasons UPDATE

BLOG: Thirty Years of Reasons UPDATE

It’s the Thirty Years update!

In March, 2020, at the height of the COVID scare, when markets were in turmoil, I wrote “Thirty Years of Reasons,” which featured a list of the many terrifying headlines that might have caused investors to sell out of their portfolios between 1990 and 2020.  I’ve updated it periodically and, since there seems to be a lot of unease about current political events, I thought now would be a good time to update our running list.

Thirty years ago, the S&P 500 stood at 475.76.[1]  As of this writing, it stands above 5,700.

Since I last published this list in early 2023, we’ve experienced the following major crises:

·         Hamas invasion of Israel, leading to Middle East war

·         Continued Ukraine/Russia war

·         Former President Trump indicted

·         President Biden withdraws from presidential race

·         Former President Trump shot

·         Trump wins re-election

·         The threat of tariffs    

Despite all the anxiety in the press about these events in the past 2 years, the S&P 500 went from 4,322 to over 5,700 today, a 32% increase.

This is nothing new.  America has faced crisis after crisis in the past, yet the markets have continued to rise.  This is because we’re investing in companies, not governments. 

The S&P 500 is comprised of the largest, most innovative, and resilient companies in the world.  These companies have grown because they have been able to adapt to and thrive through different administrations, subsequent policy changes, and various crises.  We invest in these companies because we have seen, repeatedly, that the best-run companies overcome obstacles and rise to new heights and higher earnings.  

From time to time, there will be disruptions in the markets as companies digest how policy changes and world events affect their business. The history of American Capitalism is that companies eventually adapt and march on.

So, to keep a running total and to reinforce my advice that staying invested is usually the best plan, I present the most recent Thirty Years of Reasons:

·         1995: Oklahoma City bombing

·         1996: US Budget Crisis / Gov’t Shutdown

·         1998: Russian Financial Crisis

·         1998: President Clinton Impeached

·         1999: Y2K

·         2000: Dot-com Bubble Bursts

·         2001: 9/11 Attacks

·         2002: SARS Outbreak

·         2003: N5H1 (Avian Flu)

·         2003: War in Iraq

·         2004: Indian Ocean Tsunami

·         2005: Hurricane Katrina

·         2006: North Korea’s First Nuclear Test

·         2007: Housing Crash

·         2008: Great Recession / Financial Markets Seize

·         2009: Stock Market Collapse

·         2009: Swine Flu

·         2011: Japan Earthquake and Tsunami

·         2012: Hurricane Sandy

·         2013: US Gov’t Shutdown

·         2014: Collapse of Oil Prices

·         2014: Ebola Outbreak

·         2015: Economic Slowdown in China

·         2016: Brexit and President Trump Elected

·         2018: Trade War

·         2019: President Trump Impeached

·         2020: COVID Pandemic Hits

·         2022: Russia Invades Ukraine

·         2022: Record High Inflation

·         2023: Debt Ceiling Crisis

·         2023: Middle East war

·         2024: Former President Trump indicted

·         2024: President Biden withdraws from race

·         2024: Former President Trump shot

·         2025: Tariffs threat

As I’ve mentioned in the past, it’s always unsettling when a significant event causes your portfolio to temporarily lose value but, as you can see from the chart above, it’s a fairly common occurrence. Oftentimes, the best move is no move at all.

As always, please don’t hesitate to contact me with any questions.

Regards,

Joe