As uncertainty and anxiety run high, there is hope to be found
Kevin McNab //April 14, 2020//
As uncertainty and anxiety run high, there is hope to be found
Kevin McNab //April 14, 2020//
As 2020 began, Americans were riding a wave of confidence with record-low unemployment and stock market highs. A new year brings a new start, hope and goals. America was humming along with businesses thriving, kids going to practices, cranes in the sky and a feeling that even better days lie ahead.
It was well into February when politicians and the media started to report on a virus impacting China and spreading throughout the world. Even at this point, concern was low. But by mid-March, Covid-19 ripped through America, markets dropped, and jobs were lost as fear gripped our country. Today, uncertainty and anxiety are running high. As author Emma Stone said, “Life is like the river, sometimes it sweeps you gently along and sometimes the rapids come out of nowhere.”
As a wealth management advisor, this is the third bear market I have navigated through. Each decline in the market is caused by different factors, but the fear experienced during these desperate times is the same.
The end of 2007 through March 2009 is known as the Great Recession. During this time, unemployment spiked into the low double-digits, home foreclosures were running rampant, Wall Street Giants like Bear Stearns and Lehman Brothers were toppling, and the auto industry was bailed out. This coincided with the largest drop in the stock market since the Great Recession. This not only caused the expected fear when the stock market drops, but also a fear that established institutions would fail.
March of 2000 through October 2002 is known as the dot-com bubble. Americans ambitiously invested in new age technology companies with little or no profits. As the technology bubble burst with a nearly 50% market loss, many investors found they overestimated their risk tolerance for fear of missing out as friends bragged about making money in tech stocks. The dot-com bubble coincided with one of the darkest times in American history – 9/11.
The situations are always different, but despair and fear feel the same when the economy falters along with outside influences beyond our control. At the bottom, Americans feel this time is different and that it will take years to recover. Yet, we are resilient, and this time will pass quicker than we expect. Even at the lowest point, history has taught us:
As a nation, we will not forget the people who passed away from this terrible virus, but life will push forward. It will be a period our kids will tell their kids and grandchildren about. As fear takes over Americans, be patient, be strong and be hopeful for a great tomorrow – very soon.