Managing your financial life is not just about money.

It Is What It Is!

I just passed 35 years in the financial business.  There are times when it is fun, or at the very least peaceful.  There are times when it is scary and unsettling.  It’s never been boring.  During the good times, I spend a lot of my time telling folks to enjoy those great investment returns, and to be ready for some unpleasant times in the future.  The phrase “lowering expectations” comes to mind.  During the bad times, I spend a lot of my time telling folks that the world is not likely coming to an end, and that these bad times are regular and normal occurrences.  And that they will pass.  It is not a good idea for a financial advisor to get excited in good times or depressed in bad times.  That mindset works for investors as well.


During the bad times, I hear and read the phrase “it’s different this time”.  That implies that all the other times the world seemed like it was coming to an end were minor events, but this time it’s the big one!  The specific causes of each financial crises may vary.  The big picture never does.  We work through the problems, often painfully, and move on to better times.  During the good times many folks still worry.  They are never convinced that the bad times are really over.  The huge stock market run up that happened after the financial crisis of 2007 to 2009 (the most recent end of the of the world scenario) is just another example of financial markets “climbing a wall or worry”.


I believe that optimists make much better investors than pessimists.  I believe that if you take a serious look at the quality of life you have now versus your parents, grandparents, great grandparents and great great grandparents, that you can’t help but be an optimist.  History does not support a pessimistic view of the future.  You either believe that the world will continues to find ways to solve our problems and make progress in the quality of life … or you don’t!


In a perfect world, financial markets would go up a little at a time, never go down, and never be volatile.  In the real world, we need the bad times to wash away the mistakes and excesses of the good times (even though it didn’t feel like we were making mistakes or driving asset prices above what they were actually worth).  Over the long term markets have worked their way relentlessly higher, but not without some unwelcome excitement from time to time.  It is what it is!  Deal with it and move on with your life.


This is the part where I have to say that the past is not predicative of the future, and it is possible that the financial markets of the world could go to zero and we could go back to the dark ages. But probably not!


Michael Mike McNamara - McNamara FInancialJ. McNamara, Ph.D. CFP™

Certified Financial Planner

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