ILMA Compoundings October 2016 - 51
FINANCIAL FREEDOM
Patience Pays
Murray Carter, CFP®, AWMA®
A
n old cliché says that "time cures all ills." Taken in very
broad context, this may not be as true as we might like,
but in a stock market reference, it has been historically
correct.
Investors were frustrated by the elongated trading range the
S&P 500 was in for nearly two years (June 2014-June 2016).
Exiting this range on its way to new all-time highs only partly
lowered the level of angst some equity investors felt. The
persistent barrage of disquieting international news, political
wrangling and mixed economic data elevated concern that new
market highs only brought stocks closer to the point where
something bad would happen.
Although today's specific items may differ from prior periods,
in a general sense, conditions today are no more worrisome
than investors had to grapple with in many previous periods.
Measuring stock market performance on a weekly, monthly,
quarterly or even annual basis can present a deceptive picture
of the market's bias. The shorter the measured time frame, the
more likely a myopic view can develop and lead to unfortunate
investment decisions. The chart below illustrates the average
annual results for the S&P 500 sorted in decade-based
sections. These results illustrate an important aspect to equity
investment.
Every decade in this chart has periods of severe angst that
generated concerns similar to what investors have today:
The 1950s: This decade's stellar results were achieved through
the 1958 recession and the Korean Conflict, both of which
prompted major investor concern.
The 1960s: A fourth-quarter 1960 recession provided a lessthan-auspicious start to this decade, but not long after having
shaken the ill effects of the economic slowdown, the market
was hit with the 1963 assassination of President Kennedy, then
ended the decade with GDP falling 1.7 percent.
The 1970s: This period started with GDP falling 4 percent in
the final quarter of 1970. Excessively high valuations early in the
decade left the market vulnerable, but oil would take over as
the market's biggest concern. In contrast to today's falling price,
the market in the '70s was hit with two upside oil price shocks.
Political disarray present today falls dramatically short of the
mid-decade impeachment and resignation of President Nixon.
The 1980s: Inflation driven partly by rapidly rising oil prices
pushed interest rates to levels not seen since the Civil War.
Two recessions riled the market, and, of course, there was the
22.6 percent drop on Oct. 19, 1987, that set
the still-standing record for the largest
one-day percentage drop in the Dow
Jones Industrial Average.
The 1990s: Many investors
remember this decade for the tech
boom, but this was another decade
rocked by a recession. And, of course,
Compoundings October 2016 * 51 * Vol. 66 No. 10
ILMA Compoundings October 2016
Table of Contents for the Digital Edition of ILMA Compoundings October 2016
FROM THE PRESIDENT
FROM THE CEO
ILMA THANKS
VOICES & VIEWS: Today's Most Powerful Marketing Tool
VOICES & VIEWS: As the Market Turns: Preparing for the Next Upswing in Carrier Rates
VOICES & VIEWS: Technology Trends for Lubricants Companies: The Benefits of Working with Millennials
SCHOLARSHIP PROGRAM
NOTES FROM API
NOTES FROM STLE
THE ICIS VIEW
INFINEUM: THE EVOLUTION OF PC-11 AND GF-6
MILITARY MATTERS
INTERNATIONAL INSIGHT
FOCUS ON ETHICS
REGULATORY SPOTLIGHT
FAMILY BUSINESS
FINANCIAL FREEDOM
RULES & REGS
POWER PLAY
LEGAL EASE
THE WHITE PAPER
THE HEART OF ILMA
Happy Trails: ILMA Sends Best Wishes to Retiring Members
Etna Hosts Congressional Dialogue with Rep. David Joyce
ILMA Compoundings October 2016 - 1
ILMA Compoundings October 2016 - 2
ILMA Compoundings October 2016 - 3
ILMA Compoundings October 2016 - 4
ILMA Compoundings October 2016 - 5
ILMA Compoundings October 2016 - 6
ILMA Compoundings October 2016 - FROM THE PRESIDENT
ILMA Compoundings October 2016 - 8
ILMA Compoundings October 2016 - ILMA THANKS
ILMA Compoundings October 2016 - 10
ILMA Compoundings October 2016 - 11
ILMA Compoundings October 2016 - VOICES & VIEWS: Today's Most Powerful Marketing Tool
ILMA Compoundings October 2016 - 13
ILMA Compoundings October 2016 - 14
ILMA Compoundings October 2016 - VOICES & VIEWS: As the Market Turns: Preparing for the Next Upswing in Carrier Rates
ILMA Compoundings October 2016 - 16
ILMA Compoundings October 2016 - VOICES & VIEWS: Technology Trends for Lubricants Companies: The Benefits of Working with Millennials
ILMA Compoundings October 2016 - 18
ILMA Compoundings October 2016 - 19
ILMA Compoundings October 2016 - SCHOLARSHIP PROGRAM
ILMA Compoundings October 2016 - 21
ILMA Compoundings October 2016 - 22
ILMA Compoundings October 2016 - 23
ILMA Compoundings October 2016 - 24
ILMA Compoundings October 2016 - NOTES FROM API
ILMA Compoundings October 2016 - 26
ILMA Compoundings October 2016 - 27
ILMA Compoundings October 2016 - NOTES FROM STLE
ILMA Compoundings October 2016 - 29
ILMA Compoundings October 2016 - 30
ILMA Compoundings October 2016 - THE ICIS VIEW
ILMA Compoundings October 2016 - 32
ILMA Compoundings October 2016 - 33
ILMA Compoundings October 2016 - INFINEUM: THE EVOLUTION OF PC-11 AND GF-6
ILMA Compoundings October 2016 - 35
ILMA Compoundings October 2016 - MILITARY MATTERS
ILMA Compoundings October 2016 - 37
ILMA Compoundings October 2016 - INTERNATIONAL INSIGHT
ILMA Compoundings October 2016 - 39
ILMA Compoundings October 2016 - 40
ILMA Compoundings October 2016 - 41
ILMA Compoundings October 2016 - FOCUS ON ETHICS
ILMA Compoundings October 2016 - 43
ILMA Compoundings October 2016 - REGULATORY SPOTLIGHT
ILMA Compoundings October 2016 - 45
ILMA Compoundings October 2016 - 46
ILMA Compoundings October 2016 - FAMILY BUSINESS
ILMA Compoundings October 2016 - 48
ILMA Compoundings October 2016 - 49
ILMA Compoundings October 2016 - 50
ILMA Compoundings October 2016 - FINANCIAL FREEDOM
ILMA Compoundings October 2016 - 52
ILMA Compoundings October 2016 - 53
ILMA Compoundings October 2016 - RULES & REGS
ILMA Compoundings October 2016 - 55
ILMA Compoundings October 2016 - 56
ILMA Compoundings October 2016 - POWER PLAY
ILMA Compoundings October 2016 - 58
ILMA Compoundings October 2016 - LEGAL EASE
ILMA Compoundings October 2016 - 60
ILMA Compoundings October 2016 - 61
ILMA Compoundings October 2016 - THE WHITE PAPER
ILMA Compoundings October 2016 - 63
ILMA Compoundings October 2016 - 64
ILMA Compoundings October 2016 - THE HEART OF ILMA
ILMA Compoundings October 2016 - Happy Trails: ILMA Sends Best Wishes to Retiring Members
ILMA Compoundings October 2016 - Etna Hosts Congressional Dialogue with Rep. David Joyce
ILMA Compoundings October 2016 - 68
ILMA Compoundings October 2016 - 69
ILMA Compoundings October 2016 - 70
ILMA Compoundings October 2016 - 71
ILMA Compoundings October 2016 - 72
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