The stock market has been in freefall for a week or so.
I get up every morning and look at it, which depresses me. So I get some coffee and wait about five minutes and check it again. Seems like it went down a little while I went for the coffee. I always tell myself that I should stop looking at it, but I usually sneak in once or twice more during the day, just to see how bad it is.
Saint Mary and I are investors. We’re not “day traders” or stock adventurists by any stretch. In more fortunate times, like the past year or so, we’ve taken any profits and re-invested. We’ve never spent a dime of it. That may seem overly-conservative to some, but we own our home, thanks mostly to her doubling down on the payments for many years. It’s a good feeling.
What’s causing this recent “correction,” as they like to call it? I can listen to any number of talking heads on the news and get their opinions. I like to listen to them, and then turn off the television and ask myself if it made sense. I’m not an expert, of course, but I keep getting this feeling that their ideas are no better than mine. So I’ll give you mine. Then you can turn me off and ask yourself if it made any sense.
The stock market rides on top of the economy. The economy, in the short view, is good. The long view isn’t as pretty. It ain’t rocket science; you can’t spend more than you earn. If you think you can, well, there’s a lot of people out there today who agree with you, and I’d like to see all of your math grades. But the national debt is grist for a different day.
Some people think the market highs and lows are all due to Trump. I think they’re due to trust. There are probably lots of different kinds of people in the market, but I like to think of three groups. Group One are the people who pour tons of money into the market, sell when it’s high and buy it all up again when it’s low. They’re having fun right now and I’m not in this group.
Group Two are the people who are frightened and selling every stock they own. Group One likes these people. Group One may have started the selling, but it was all done to scare Group Two and get the selling started. Group Two is not having fun right now. I’m not in this group either.
Group Three is where I call home. Saint Mary and I didn’t invest in the market to make billions of dollars. That would be nice, but we invested for our children. I’m not sure the other groups know the meaning of the word investment, but they can look it up. You may be in Group Three.
Group Three knows what Group One is up to. Group Three will sit tight while Group One buys up the market from Group Two at bargain basement prices. And eventually, Group Three’s value will rise again like the fabled Phoenix from the flames of its pyre. Won’t happen overnight, but it’ll happen, sure as you’re reading this.
Group One will be fabulously wealthy or deeply in debt. Group Two, who knows? Group Three will be fortunate and have time to do the things they intended without checking the stock market every five minutes. They have realized that time is more valuable than money.