I’m officially out of the predicting business!
Did you know that long term government bonds averaged 8.89% over the last 10 years? It’s true. While this is a function of interest rates dropping over that period of time, pretty substantially I might add. There was not a person I talked to over the last 10 years who was convinced that interest rates would fall from where they were. In fact it was quite the opposite. Bonds are never as sexy as stocks so using those predictions are not as fun but my point is making predictions is really, really hard.
As for where we go from here. Yes we’re officially in a recession (whatever that means) and if you look back at history in the last 100 years there have been 15 recessions total. Of those only 4 instances did it take longer than 2 years to fully recover and reach new highs from where the recession started. Yes 2007 was one of those 4, it took almost 5 years to recover from that. Click here for a great article “Don’t Let a Recession Faze You”
So where do we go from here? I haven’t the slightest idea of how long it will take us to recover. Of course I have my own feelings about what happens next but using those feelings to make a prediction and then ultimately influence my investment philosophy would not be a wise idea. I can tell you the feedback I’m getting from my own clients is almost split 50/50 Half think this is going to be a 5-10 year recovery period and some think we could see new highs within 12 months. The important thing is that we stay consistent, have discipline, and stay the course. Discipline and Patience are some of the best ingredients to being a successful investor.
If you have a question concern or even a prediction you want to share with us and talk through click here to schedule a time with Mike or myself. Have a great weekend!
