I Don’t Want To Invest My Money Now Because

“The only thing new in the world is the history you do not know.”
Harry S. Truman


Every year Stonegate updates the article/graphic “I Don’t want To Invest My Money Now Because …”. Here’s the thing, there will always be a reason not to invest! I have seen too many families handicap their financial future by trying to time their entry into the market. As the father of modern quality management, W. Edwards Deming, once said, “In God we trust; all others bring data.” To that end, I invite you to match up the years below with their corresponding year ending Dow Jones Industrial Average numbers. The data is clear … it’s time in the market not market timing that is one of the keys to successful wealth creation.

The Coronavirus is the “new” reason many individuals do not wish to invest today. I do not claim to have any idea how far this outbreak will spread, nor how many lives it will claim before it is brought under control. I’m reasonably certain that many (or perhaps most) of the world’s leading virologists and epidemiologists are working on it and that their efforts will ultimately succeed. Clearly this is nothing more (or less) than my personal opinion. However, if the rich history of similar outbreaks in this century are any guide this would seem to be a reasonable hypothesis. For evidence I draw your attention to:

  • SARS in 2003-04 also originating in China.
  • The bird flu epidemic in 2005-2006.
  • In 2009 a new strain of swine flu.
  • The Ebola outbreak in the autumn of 2014.
  • The mosquito-borne Zika virus outbreak in 2016-17.

Or as Mark Twain once said, “History doesn’t repeat itself, but it rhymes.”

For an excellent data based article on how previous viruses have impacted the stock market I encourage you to read How Will Coronavirus Affect Your Portfolio?

Please click on the image below to open the larger PDF version.

 


Keith N. Thomson

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