Cutting Through the Noise

May 28, 2024

In any professional endeavor, one is inundated with information – ideas, analyses, recommendations, and (sometimes) rants.  Over time (and I had a lot of time) one learns to separate the wheat from the chaff, and gravitate toward resources that provide the best long term perspective on the financial world.  Who is a clear and consistent thinker?  Who expresses their views clearly and concisely?  Most important, whom do you trust when answers are never cut-and-dried?

This is particularly important in investment management.  We are by nature and for client success focused on long term results.  The vast majority of the information we see is immediate in nature. Did Microsoft beat this quarter’s earnings estimates?  Will June’s CPI show a 0.3% gain or a 0.4% gain?  And on and on…

Daily Data Swings Smooth Out Over Time

This data drives the market on a daily basis, but over the long term is relatively insignificant.  To take an extreme example, in October 1987 the S&P 500 lost nearly a quarter of its value in one day.  Look at the chart below and see if you can spot it. 

This isn’t to imply that it wasn’t a traumatic event when it occurred (it was – I was there!).  What it shows, however, is that a focus on the long term is more important to producing a successful investment outcome than are day-to-day gyrations.

The Significance of the Debt Crisis

As discussed in previous weekly and quarterly commentaries, I believe there is no financial issue facing us as significant as the long term impact of out-of-control federal spending and debt creation.  Dr. David Kelly, Chief Global Strategist for J.P. Morgan Asset Management, wrote on this topic a couple of weeks ago.  Dr. Kelly is one of my ‘go-to’ resources for clear thinking, insightful commentary, and an understanding of the bigger picture.  Please take a few minutes to review his thoughts on this topic:

The Investment Implications of the Federal Debt: An Update | J.P. Morgan Asset Management (jpmorgan.com)

Circling back to the beginning, it’s important to pay attention to today’s news.  A comprehensive financial plan, however, focuses on the achievement of long term goals.  Proper plans incorporate a range of outcomes in a wide variety of short term environments.  Still, long term strategies must develop in the context of an overarching theme.

Your Wealth Management staff keeps their efforts focused on your long term success.  Our goal is not only to grow your wealth but, equally important, protect it over time.  Give us a call and let us show you how it's done.  Your financial success matters to us.