When the Recovery Will End, Emotion, Controversy

When Will the Recovery End? (Spoiler Alert: It’s Already Over)

After 10 years, surely the end of the recovery is near?  I still see investment products pitched with this kind of wording.  It turns out that the recovery ended 84 freaking months ago.  Since then, we’ve been in expansion.  84 months sounds like a long time (7 years!), but in the context of previous expansions, it’s not remarkable in either length nor size (there’s a joke here, somewhere).  The expansion following recovery from the tech crash was just 12 months, with a gain of 14.6% on the S&P 500.  However, the two prior expansions were 135 and 134 months long and gained over 400 and 500% (see graphic).  Should we be worried about the current expansion?  Let’s break 100 months first, then three years after that let’s start worrying.  In the meantime, stick to your financial plan.

Taking the Emotion Out of Investing

Keep your emotions out of your investment decisions.  This is a common theme from advisors, money managers, and mobster movies.  It’s not personal.  It’s business.  But what if that’s not 100% correct.  It’s possible to remain calm under pressure, but still feel good or bad about the situation.  Think about a good quarterback like Baker Mayfield (or Tom Brady if you must).  Their decision-making process is very mechanical, but they know how to motivate themselves and fire up the rest of their team.  There has to be some motivation or reason to save and invest.  If you don’t care about your money on some level (you want to retire, provide for a loved one, give to a charity), what is all this for?  If you’ve got automatic transfer setup for a savings or 401(k), spike the ball every time you see that money move.  You’re that much closer to winning the game.

Controversy on the 4th of July

Finally, I have to speak out regarding the recent controversy.

A hotdog is not a sandwich.  There, I said it.

A hotdog is a taco.