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First Quarter Market Review – Climbing a Wall of Worry

In Investments, Market Review by Chip Hymiller

Even in the face of what many consider sizable headwinds, the markets continued the advance which began in 2009.

How is it even possible for both the stock and bond markets to advance so meaningfully in the face of so much adversity and doom and gloom?  Consider the following:

Economic growth has slowed essentially to a crawl, with GDP advancing by only 0.4% in the fourth quarter of 2012.

  • Unemployment rates remain stubbornly high, with “under” employment (those wanting full-time jobs, but settling for Investment Advisor CFP Financial Planner Raleigh Chapel Hill NClower paying or part-time jobs) at a generational high.
  • The housing market, while strengthening somewhat, continues to be weak by most measures.
  • The political landscape in the US has never seemed more divided and dysfunctional.
  • The Eurozone is a financial and economic mess.  Economic contraction is the norm, with some countries struggling to contain social unrest due to forced cuts in government spending and social programs.

In the face of all of these issues (and there are many others!), how is it that stocks can continue to “climb this wall of worry” and advance so significantly?

While I have my own opinion of the answer to this question, the fact of the matter is that as a long term investor, I really don’t care and you shouldn’t either!

Of course that’s not to say that I am totally indifferent to the emotional roller coaster of market movements—I am after all human.

However, I refuse to allow media hype and short term market fluctuations influence those long term investment and financial decisions that my clients hire me to make with their best interest in mind.

Having the ability to accept the uncertainty of the day-to-day, while confidently clinging to the knowledge that you are making sound long term financial decisions is one of the major realizations that successful investors must make.

Climbing the wall of worry is just one of the many obstacles that we occasionally endure on the pathway to financial freedom.  Enjoy the climb.

We hope that you have a great spring!