Are You Getting Queasy with These Markets?

Investments
Written By Mike Mulcahy, CFA® CPWA® CTFA

I have been deep sea fishing several times. As the boat pulls into the deep, open ocean waters and begins methodically pounding against the swells, inevitably there are fellow passengers that begin feeling queasy. While some seek solace in the fetal position below deck, I was taught that to make it through the trip and reduce the chance of seasickness, you had to keep your eyes on the horizon, embracing the swells, and focusing your mind on the prize.

"Seasickness is the result of a complex physiological reaction to motion," says John Bradberry, MD, medical director for Carnival Cruise Lines. "It is a mismatch of information sent to the brain from the eyes, inner ear, and sensory nerves, such as in the feet."1

With the recent market swells, I imagine many of you are feeling some queasiness. Short-term volatility is a mismatch with longer-term objectives causing cognitive dissonance and driving us to lean over the boat’s rails (that is, feel “pukey!”).

So, to help you along this trip and toward the prize, here are some interesting numbers to keep in mind. These represent the approximate returns relative to the S&P 500’s total returns over different periods of interest:

Since (and as of 12/7/2018) Returns[2] My Thoughts & Comments
Monday -5.3% Yikes! I'm getting sick!
Day After Thanksgiving 0.1% Really? Just a few weeks ago?
High for year (9/20/18) -9.8% OMG! Head to the rails!
Low for the year (2/8/18) 3.8% I'll take that! Good old days!
1 year 1.4% Hard to believe. Seriously?
2 years 10.1% What, the Trump bump was real?
3 years 11.6% I'm feeling a little better.
5 years 10.5% I think the sun is coming out.
10 Years 14.0% Getting my line ready!
20 Years 6.2% Bring on that school of tuna!
30 Years 10.2% I’m catching me a marlin!

Hopefully, this helps you feel a little better. It is important to always keep your investment horizon in perspective. Happy fishing!

1 https://www.everydayhealth.com/digestive-health/easy-ways-to-keep-from-getting-seasick.aspx

2 Annualized returns when 1 year or greater

Mike Mulcahy, CFA® CPWA® CTFA

With the founding of Kings Path Partners, Mike brings a diverse set of professional and personal experiences into the wealth services business. His professional roles and community experiences give him a unique and real perspective into the needs of families, entrepreneurs, and business executives. Previous roles include president of a $6B investment management firm; management consultant with McKinsey & Company; VP of corporate finance & strategy with Compaq/HP; and managing director of an entrepreneurial web-based business. He is also an active venture investor with a focus on impact investing and social enterprises.

Mike earned an MBA from the Harvard Graduate School of Business and completed an Executive Program in Portfolio Management at the University of Chicago. He graduated summa cum laude with a Bachelor of Science in Economics with a minor in Chemistry from Texas A&M University. He holds designations as a Certified Private Wealth Adviser®, Chartered Financial Analyst®, and Certified Trust and Fiduciary Advisor (CTFA). He is a member of the Investments & Wealth Institute® and the CFA Society of Houston.

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Kings Path Partners, LLC (KPP) is an SEC-registered investment advisory business based in Sugar Land, Texas. KPP has published this article for informational purposes only. To the best of our knowledge, the material included in this article was gathered from sources KPP believes to be accurate and reliable. That noted, KPP cannot guarantee that this information is accurate and complete and cannot be held liable for any errors or omissions. Readers have the responsibility to independently confirm the information herein. KPP does not accept any liability for any loss or damage whatsoever caused in reliance upon such information. KPP provides this information with the understanding that it is not engaged in rendering legal, accounting, or tax services. In particular, none of this published material should be considered advice tailored to the needs of any specific investor. KPP recommends that all investors seek out the services of competent professionals in any of the aforementioned areas. With respect to the description of any investment strategies, simulations, or investment recommendations, KPP cannot provide any assurances that they will perform as expected and as described in this article. Past performance is not indicative of future results. Every investment program has the potential for loss as well as gain.

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