TALL POPPY SYNDROME

It’s official… poor old financial markets are damned if they do and damned if they don’t!

We know only too well the media love nothing more than a good financial markets beat up when returns turn red for too long. Well, it turns out the media also like a good beat up when financial markets turn green for too long. That’s right, the media love to sell fear when financial markets sit at or near all-time highs. Instead of us all rejoicing the likely growth in our investment portfolios, the media suggest we should be fearing the next crash!

It doesn’t really come as a surprise that the media want their cake and to eat it too. This is how they survive and we guess it would be a lesser world without the media.

So whilst the media again start to beat their fear drums of an impending crash, what’s actually going on? Well, most major financial markets around the world have touched all-time high’s or are near all-time high’s.  

If we look at the local Australian stock market, it hit a new record high earlier this month and now sits around 2% off that high. The S&P500, being the major stock index in the US, also hit a record high earlier this month and now sits around 2% of that high.

It’s fair to then assume that for the majority of you, your super funds are looking very healthy!  

Some of the doom and gloom about impending crashes relates to the fact that a big chunk of gains on markets connects back to AI (artificial intelligence) and tech. And whilst that is correct as far as such companies have performed very well, its fair to assume that these companies, whether we like it or not, are becoming a big piece of the future and will continue to drive the global economy.

Whether markets pull back or keep careering ahead, we know that over the long term, being the only term any of us should really be focused on when investing in growth assets, financial markets go up much more than they go down. Average long term financial market returns of 7% to 10% can be expected based on historical returns.

As we’ve reminded you on more than one occasion, investing needs to be boring. Tune out from the noise. Focus on why you’re investing and your timeframe (your why and when). Years and decades, not hours and days.

Grab your popcorn and enjoy the show!

Cheers,
Dan and Dave