Let me ask you a few things:
- If you think the world is getting worse in the long run;
- if you think I’m a fool to believe my daughters will grow up to have full, rich lives in this country or another;
- if you think personal and professional innovation is dead;
- if you think any politician is outwardly, actively trying to “destroy this country,” (and has the power to do so);
- if you think global competition is actually bad for capitalism;
- if you think every generation younger than you is lazy and worthless;
- if you think people aren’t interested in making their lives better for themselves and their families;
- if you can’t find yourself among positive, forward-looking, optimistic people;
- if you choose to only see the downside;
- if you think it really IS different this time;
- if you choose to only ingest doomsday theories and “news”;
- if you cannot find yourself interested in making the world around you a better place;
- if you truly, honestly believe the world is in an uncontrollable downward moral, economic, spiritual and ethical spiral:
Don’t invest in financial markets. Don’t own stocks in the US or foreign markets. Don’t lend money to corporations or governments by buying bonds. Don’t put your money in FDIC insured CDs and bank accounts.
Instead, rent an excavator. Dig yourself a nice shelter in the backyard with 24″ concrete walls. Line the walls with shelves full of bottled water, canned food and twinkies. Arm yourself to the teeth. Trade your currency for the things that will be valuable in your dystopian future: water purifiers, fuel, ammunition. Then sit and wait. Clog the internet with your pessimism, with your unending conviction that the end is near. Then wait some more.
Please, though, don’t be an investor. Your pessimistic convictions will be your worst enemy. Everywhere you look you will see signs that reinforce your belief that things are getting worse, while you ignore this simple fact:
Things get better.
Economies cycle through recession and growth. Stock markets fall, only to recover to new highs. Debt spikes during recession only to level off during expansion. New and old companies alike innovate, create, expand, invent and profit. They swallow the pieces of failed companies and spit back out new earnings growth. The individuals behind these companies jump over regulatory hurdles, break down competitive barriers, out-innovate their competition and win new customers.
So while you sit and wait, the rest of us will get up in the morning, feed our families, go to work to earn a living, to create, to grow, to innovate. Quietly we’ll struggle and we will progress. As investors, we’ll see through the fog to the end game, the long horizon of investment success that is long-term earnings growth and a return on invested capital.
In my career I’ve worked with hundreds of clients and I can tell you that a pessimistic long-term outlook is the greatest impediment to financial success. If you find yourself thinking this way, start eliminating negative influences. Turn off the news and be more mindful of what you read online. Spend less time with negative people. Go and do good and be around other people who are doing the same. Be involved in your community and give back with others. Start looking for the good in the world around you. You might surprise yourself. And you just might become a more successful investor.