“I cannot tell you anything that, in a few minutes, will tell you how to be rich. But I can tell you how to feel rich—which is far better, let me tell you firsthand, than being rich. Be grateful.”
–Ben Stein, actor and investment commentator
Last week, The Nalls Sherbakoff Group was closed on Thursday and Friday so we could gather with our families on what we like to call “Be Grateful Day.” We are grateful for the many blessings of our nation and ourselves. We are grateful for the sacrifices made by so many in the military, so that we could live in a free nation. We are grateful for the sacrifices made by our ancestors, whether they were pioneers, or subsistence farmers, or living in ghettoes in Europe, just so we could be here today. Today, we enjoy better food, better medicine, central heating in the winter, cooling in the summer, and nearly unlimited creative, financial, and travel opportunities.
As long as we can enjoy the laughter of a small child, the warm hug of a loved one, and the satisfaction that comes from a life lived with purpose, we can feel grateful, and are indeed richer than many who live life at the pinnacle and can afford anything.
It has been our honor to be financial advisors to very accomplished people. We have also had the honor of serving war heroes, such as veterans of the Battle of the Bulge and wars in the Pacific.
Yet we feel most honored to help others reach more everyday goals. We’ve been financial advisors to folks who’ve quietly saved and sacrificed to send their children to college, or to plan as well as possible for the future of a special needs child. None of that is easy, and we have great respect for you.
We work in a profession that is supposed to be all about markets and numbers, yet we appreciate and cherish our clients. For us, it’s all about the people who invest with us. As author Nick Murray says, it’s not about points on a chart, it’s about places in the heart.
With respect to our nation, 2020 has been one of the most difficult years in memory. We are grappling with COVID-19 and its fallout, economic upheaval, racial tensions, wildfires, hurricanes, a presidential election, and a polarized electorate. Despite this year’s difficulties, a strong economic recovery, record low interest rates, and an aggressive stance by the Federal Reserve have helped the major market indexes rebound from March’s steep sell-off.
But where do we go from here? What’s in store over the next four years? If we narrow our scope and review the landscape through the lens of the investor and the market, we believe we can look to history for guidance, and at least obtain some degree of clarity.
First, remember that no one has a crystal ball. Any stock market forecast presented by the analysts is simply an educated guess. They may get lucky for the right or the wrong reasons. Or, the analysts might miss the mark by a wide margin. As we already know, even the smartest folks in the room don’t know what the future holds.
Besides, we already know that consistently timing the market is virtually impossible. However, over a longer period, we recognize that stocks have historically had an upward bias. “Since 1932, the S&P 500 Index has gained an aggregate of 710% under Democratic presidents and 375% under Republican presidents. But staying invested the entire time would have earned 47,000%,” according to the Schwab Center for Financial Research.
A disputed election could create short-term uncertainty. Yet, emotional decisions made outside the boundaries of a well-crafted financial plan have rarely been profitable over a longer period. Longer term, it’s been the economic environment, Federal Reserve policy and interest rates, corporate profits, and inflation trends that have historically had the biggest impact on the broader market.
The country will remain divided after the final tally is known. But let us not forget that the U.S. remains the world’s largest economy; it has the deepest and most transparent capital markets, and innovation isn’t likely to end. We will face challenges in the days and years ahead. We have always faced challenges. But we are resilient, and we continue to believe history is on the side of the United States of America, and for that, we are grateful.