Last Sunday night’s 2016 Olympic Games delivered drama on the tennis courts. Serena and Venus Williams lost in the first round of their doubles match – their first-ever loss in the Olympics, while Jamie and Andy Murray, Davis Cup winners and Wimbledon champions, were eliminated as well. The upsets weren’t limited to US players, as Serbian Novak Djokovic, the world’s number one ranked male player, was defeated by Juan Martin del Potro of Argentina.
Sometimes, when we’ve done all we can to prepare for something, and our success appears nearly certain, things happen that take us down another path. Each one of these athletes was predicted to win, and they’d probably done all they could do to prepare, but competitive athletics and life are both full of surprises.
Baby boomers have had a few surprises thrown at them on their march toward retirement. The dot-com bubble that began in 1997 convinced many to invest heavily in in technology, due to concern they would be left behind in the ‘new investing paradigm’. What followed was the 2000 bust that wiped out many companies and cut an equal number to half their size. In the same year, P&G, a pillar of stability for investors, lost more than 30% of its value in one day.
In 2000, real estate prices began to climb, as many people invested in what felt like a safer alternative to stocks. Helped by government policies that created lower interest rates, easy credit approval, and greater borrowing capacity for consumers, home prices climbed all over the US, particularly in Arizona, Nevada, California and Florida – popular retirement destinations. In early 2006, home prices peaked and began their descent, dropping 18% in 2008 alone. Prices in retirement communities like Phoenix were affected even more, and fell by 32.7% in one year.
The housing boom, and the dubious mortgages and investment products the boom spawned, touched off a financial crisis in 2007 that bankrupted Lehman Brothers and culminated in the Great Recession. The Dow Jones Industrial Average, which lost half its value from its August 2007 peak, recovered by March 2013, but the pain of loss is still a strong memory for lots of investors.
This trifecta of things gone wrong was difficult, and caused severe hardship for some. After the technology bust, many people lost their jobs or had their incomes cut significantly. Homes couldn’t be sold because they were worth less than their mortgage balances, and the Great Recession prompted some to panic and bail out of stocks, only to watch the stock market recovery pass them by.
This all sounds like ancient history as the Dow Jones Industrial Average sits above 18,500 – over three times its March 2009 level. But the US Presidential race and the heated arguments around the state of our economy show there are a significant number who feel they’ve missed out on the US recovery, and they’re very angry about it.
It’s much easier, and it is human nature, to blame circumstances beyond our control rather than do the hard work to adjust to a new reality. But it doesn’t eliminate the problem. As a financial advisor, I believe we have more control over our own financial success or failure than our President or political party, and it’s up to us to adjust when things don’t turn out the way we want.
If you’re willing to do the work with us, we’re here to walk you through a process to help you discover your needs, wants and wishes for your life. We can take a realistic look at your situation, and determine adjustments that need to be made to accomplish the things that are most important to you. Holding onto anger about what has happened in the past, or worry about what may happen in the future, doesn’t help.