After the market rallied nearly 11% on Monday, it dropped 1.5% yesterday, and another 9.3% today. Given that I manage money for a living, and am experiencing this manic market firsthand, I find myself somewhat sympathetic to stories of folks stuffing their money under a mattress.
I think that taking a moment to be kind to ourselves is probably in order. In fact, curling up for a quick nap on that mattress under which we are thinking of stuffing our money might not be a bad idea.
But then what?
Do we really liquidate all our positions, and sit entirely in cash?
Last week, a CNBC reporter asked a money manager what he thought the market would do this week. He didn’t say up or down, but wondered aloud if we shouldn’t all take the proverbial ‘time out’, given that everyone, including money managers, seemed to be succumbing to fear.
A frustrated, and no doubt exhausted reporter, launched into a Tom Cruise/Jack Nicholson-worthy harangue — “You need to tell us the truth. The people deserve to know the truth.”
But, in this instance, the truth, was, and is — we, those who invest, decide the truth.
Will the market drop precipitously?
If we stuff all of our money under the mattress, the market will drop.
Will it surge?
If we invest, the market will go up.
I recently heard private equity investor Bob Gay make two statements that were meaningful to me when the market was 35% higher. They are even more meaningful today, and have, in fact, become my professional watchwords.
First, paraphrasing economist John Maynard Keynes, he said, “The social object of investment is to defeat fear.”
Second, “We must have the courage to take limited means, and to invest in and encourage others…”
Said more pithily, and paraphrasing western colonizer Brigham Young, we need to “keep planting cherry trees.”
Should we throw caution to the wind?
Of course not.
But should we stop investing? Planting cherry trees? No.
Because if we do it will begin to affect everything we do and are.
And not just us, our children too.
Said Sarah Ban Breathnach “Both abundance and lack exist simultaneously in our lives, as parallel realities. It is always our conscious choice which secret garden we will tend.”
So yes, the market’s bad, and yes, we’re scared.
We still must decide which ‘secret garden’ we’ll tend.
Do we continue to invest in and encourage others?
To plant cherry trees?
Dare we not?
P.S. Over the past few weeks, both at work, and at home, I’ve started making a daily list of what I’m grateful for — an informal gratitude journal in hopes that I can tend the ‘garden of gratitude.’