History is not a random sequence of unrelated events. Everything effects and is effected by everything else. This is never clear in the present. Only time can sort out events. It is then in perspective that patterns emerge.
-”A World Lit only by Fire” William Manchester.
I wrote last week about the fallout from the Global Financial Crisis and the decade that has followed. As stated last week markets have more than fully recovered despite changing Presidents twice over three elections, one of which is Donald Trump who has no previous political experience.
Looking back on the GFC it seems obvious that the housing market would collapse and if you are not careful you will look for those reasons in future run ups in future markets. The chart below shows the rise in the S & P 500 matched up with all of the events that coincided. I remember conversations with clients during these times, IE Brexit.
Source: Michael Batnick
At any moment in the current moment events will feel like this will be the one that pops the bubble. It's an interesting conversation but acting on these uncertainties can have long term impacts on your financial story. IE. Waiting to buy a house, waiting to invest in the stock market, waiting to start a 529 for your child, even having children until you are financially ready.
The key is to build a plan that that takes into account what you want to accomplish and make adjustments as necessary.
Have a great weekend and Take the Long View!
Thought for the Week:
“What happens in the next 12 months will look very obvious in 20 years.” - Michael Batnick