FILE – In this Nov. 19, 2020, file photo, a nurse works on a computer while assisting a COVID-19 patient at a hospital in Los Angeles. Across the country, doctors and nurses on the front lines of the coronavirus pandemic are dealing with hostility, threats and violence from patients angry over safety rules designed to keep the virus from spreading. (AP Photo/Jae C. Hong, File)
When investors review their September statements, they will notice that market values tailed off from the previous month. Having a down month is not that unusual for experienced, long-term investors. And in the big picture, it shouldn’t be alarming either.
However, as we enter the final quarter of 2023, I’m concerned about the overall negative sentiment across the nation. There seems to be an overabundance of unhappiness and pessimism. So much of the success of the investment world can be attributed to investors having an upbeat attitude and positive outlook.
Much has been written and said about divided our government that borders on the brink of being dysfunctional. By the time this article hits the press we will either have an eleventh-hour deal to keep the government running, or we’ll be in the midst of another shutdown.
As bad as a shutdown may be, it’s better than a default on our debt. All the debate over keeping the government’s doors open only fuels the negativity. Very few appear to be concerned about the rating services downgrading our debt. But it should be a concern. A major concern. Because a downgraded USA debt is not a good thing. And Fitch has already downgraded it just this past August.
I fear that if we shut down and kick the national debt down the road we could be hit with a second downgrade. Moody’s, for example, might be taking a hard look right now. And another downgrade would not bode well for the economy or the markets.
In addition to a potential government shut down, there are discontented workers across the country, highlighted by the UAW strike. And on top of that, we have a border crisis that’s affecting the entire country, a war in Ukraine, and, oh yes, inflation. No wonder there’s so little optimism these days.
Many successful long-term investors have accumulated their nest eggs because, at some point, they resisted the urge to panic and sell in the face of negativity. And there certainly is an overabundance of negative news right now.
As we close in on the year-end, I suggest you consider taking action. Don’t follow the emotional herd and reduce your investment holdings. I’m not suggesting anything too dramatic, but you might consider making a positive decision in the face of all the negativity.
For example, if you have the financial wherewithal, increase your 401(k) payroll contributions. If you have young children or grandchildren, consider making a contribution into their education fund. Finally, if your have sufficient cash with no immediate needs and you can commit to at a 36-month timeframe, consider opening or adding to an existing investment.
I mention these ideas because, occasionally, when everyone is bleak and pessimistic and taking a wait-and-see attitude, you might find success by going against the grain.
Nobody can predict the future. Nor can anyone be certain when it’s the best time to invest. On the other hand, inaction is also a decision.
In times of uncertainty and negative news we tend to be financially paralyzed. In times of fear we tend to panic. But I firmly believe that when most are pessimistic, there’s an opportunity for success. When most are timid, take action. fearful and fleeing, hold your ground and stick to your goals.
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The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. Comments concerning the past performance are not intended to be forward looking and should not be viewed as an indication of future results.