The S&P TSX began it’s cyclic decline in April of this year. In early August, investors around the world spooked by dropping oil prices, China’s devaluing the Yuan, global growth worries, earnings slowdowns, potential rising US interest rates or maybe because we’ve just gone too long without a decline, woke up one Monday and decided to sell and we saw a 5% or so decline in a day or two on most markets around the world. Other investors, seeing the bargains, jumped in and bought, then a few
The chart below may say it all, it names the financial “crisis” over the last 4 years and the inflow of money into cash during the Euro crisis, Fiscal Cliff, Taper Tantrum and the recent oil/China/global growth worries crisis. Given the S&P500 has risen about 900 points during this time or a cumulative 75% – not sure what all the fuss was about.
It can’t be corporate earnings, which are healthy, or corporate liquidity (access to cash is important to business and there is plenty) or employment or home prices in the US which are rising, or consumer debt defaults (which are at all-time lows in percentage terms), or stock buy backs (which are strong – always a good sign when companies buy their own stock) can’t be stock dividends (which are rising).
So what can it be? Maybe just that the S&P500 had gone 1,419 days without a 10% correction – the third longest such run in the last half century. The average intra-year decline has been 14.2% (so we haven’t yet reached the average!) Same old, same old and it was time.
If you had all the time and money you needed, what would you do?
I’m a planner, it seems to be in my blood – I estimate I have about 13,000 days left on this planet and I want to make good use of each and every one of them. Planning is the only way I feel I can do that. I see Financial Plans as Life plans – it just makes so much sense to complete them together. Most of the articles on Financial Planning focus on the money part – which is backward when you think about it – shouldn’t we be deciding what’s really important to us, then decide on the goals to achieve?
I came across this article which may inspire you to review your plan. But just replace the words “money” and “financial” with “life” and notice the change in perspective.
Article: 10 Reasons Financial Plans Aren’t Just for the 1%
By the time you read this we will be in Italy enjoying the food, wine, and atmosphere. We will be staying in Bellagio in the north for 3 days, then Tuscany for a week, and Cinque Terra for 3 days before flying home on the 16th. Pictures to follow.
In August I visited my daughter Sasha in Alberta and she arranged for us to do a few back country hikes. I got to experience the side of mountains only serious? hikers do. The first 2 day hike was to the Abbot Pass Hut. Abbot Pass is reached from Lake O’Hara just outside Banff and is at about 2100m elevation. The last 300m to reach the hut is up a steep shale incline where you take 3 steps make 2. Brutal. The hut is booked through the Alpine Society of Canada and is almost 100 years old. We shared the hut with 26 other hikers. Where the climb up took 4 hours, the climb down the next day took a leisurely 1 ½!
After a comfortable night in Banff we headed to Kootenay Park for the Rock Wall hike – it’s a well-known 40km circuit of which we only partially completed. From the Trail Head at the Ink Pots, it starts with a 12km hike over rugged terrain to Helmut Falls, where we spent the first night – one of the highest falls in North America. The next day another 12 km along the rock wall (mountain range) through a plateau and we stayed at Tumbling Creek. The last day was another 12 km hike out. I was ready for a shower! After 6 days, Sasha had to get back to fighting Alberta wild fires and I back to Ottawa.
Abbot Pass and Kootenay Pictures