I was having a conversation with a client earlier this week, and she mentioned to me that what we were living through at present was truly unprecedented, and that no amount of statistics or past reference points could possibly be informative to the current environment, and therefore, all bets were off, when it comes to the markets and investing in the short to medium-term. It’s the kind of statement I’ve heard before, during times of extreme market stress, and it instantly made me think of something that Jarrett says all the time, and perhaps many of you have heard before. That the four most dangerous words in investing are “it’s different this time.”
And while I most certainly agree with that statement, and have uttered it many times myself, I did have to pause for a moment and recognize that this moment in history does feel different. I know that I personally have never lived through anything like it. Lockdowns, shelter-in-place orders, quarantines and school closures; it’s the stuff of history books. And I really have nothing in my lifetime to compare it with.
But as I watch the markets react to all of the news, the dire predictions, and surreal press conferences, there is something familiar about it. The huge down days and snap-back rallies, and the banners scrolling across the bottom of the news channels declaring “Markets in turmoil”, or “Dow posts biggest one-day loss of all-time”; the nation’s leaders promising to do whatever it takes to help those most affected, then failing to agree on what that means, before ultimately passing some sweeping legislation that everyone just hopes will do what’s needed. I feel as if I’ve seen this all before. It was the same during the great recession in 2008-09, and the recession following the dot-com bubble in 2000-01. The circumstances were different, of course, but the way the markets reacted, and the sensationalism of the media coverage surrounding it, have much in common.
And as I was thinking about this, I remembered another conversation I had not too long ago with my mother-in-law. She is from England, and was a little girl in London during the blitz. The bombing was so fierce that most families who could, sent their children to live with other family members outside of the city. My mother-in-law was sent with her sister to live with an aunt in the countryside, but her father and mother stayed behind. He was a bus driver in the city, an essential service provider, if you will. I thought about what that must have been like, and how it felt to live through such a harrowing time, and that it must have felt like nothing ever before. And, in many ways, it was like nothing that had ever happened before.
I think that’s the point. These moments in history always feel different, because in some ways they always are. But we go on, because of the tenacity of the human spirit, we persevere, and come out stronger on the other side.
I read an article this morning which featured the stories of five different people in Italy, and how they are handling the lockdown there. It’s here if you want to read it:
But there was one paragraph which really struck me, and I got a bit emotional reading it.
“We have two unmissable appointments with our neighbors, and with all Italians (and with the entire world through the power of social media). Max, my husband, and I go to our rooftop terrace or just open windows to applaud doctors and nurses (midday) for their hard work and very little rest, courage and total dedication and commitment to save people, risking their lives,” she said. “It’s a heartbreaking moment yet very powerful. At 6 p.m. we wave at each other, we play music and sing along to famous Italian songs like “Azzurro,” from windows to balconies and rooftops. It’s the only moment of the day that we see and talk to other people. I don’t know most of them but now I feel them so close to me. We are sharing a sense of solidarity and hope, we are feeling stronger and united, we feel part of the same community that is fighting the same invisible enemy. This warms my heart. We’re coping with this with our Italian soul, sense of humor, resilience, creativity, and a bit of craziness. I’ve never been prouder to be Italian…. If Italians can do it, you can too. In this increasingly global world, we are all in this together — #andratuttobene,” which translates to, “all will be alright.”
I don’t know exactly why this seems so powerful to me. Maybe it’s my Italian heritage and the affinity I feel for the country and the people there. Or perhaps it’s because I see in that statement, the potential for a silver lining to all of this that we are having to go through right now. It feels as if in recent years we humans have become so polarized and isolated from one another. It’s always us against them, and the public discourse has become downright toxic. Maybe we’re being taught the harshest of lessons right now. That we’re better together. That we need each other. And my sincere hope is that when this is all over, we can ty to remember that, because if we can, perhaps all this suffering will not have been in vain.
I can’t help but feel a bit insensitive talking, as we often do, about the financial impacts of issues which are affecting people’s lives in such profound ways. Lives are being lost, and that is not something I take for granted, but looking at financial impacts is our job, and the commitment we’ve made to our clients. And in light of the fact that this does feel like nothing that has come before, it is important to remember that these kinds of moments always do. And that if you have a plan, and your financial life, outside of your investments, has not been turned upside down by this, it is never a good idea to make knee-jerk reactions with your portfolios based on short-term market events, or because it ‘feels different this time.’
I’m always reminded, during times of stress and uncertainty, of a quote from a speech given by Abraham Lincoln at the Wisconsin State Fair in 1859, and one day, hopefully sooner rather than later, we will look back on this moment and realize we were right when we thought, as he so eloquently put it all those years ago, – “and this too shall pass.”