The Prudent Retiree - August 2021
By now, you have most likely seen the tragic images of the fall of Afghanistan to the Taliban. It wasn’t supposed to happen this way. Probably most of you remember the same awful images of the fall of Saigon when we pulled out of Vietnam. Sadly, we have been here before.
CSN&Y was one of the first Rock and Roll super groups. They recorded many gold records and are in the Rock and Roll Hall of Fame. I first saw them at the World Series of Rock at Cleveland Stadium on August 31,1974. The Band and Santana were also on the bill. My wife, Susan, was there, too. We had yet to meet and I probably wouldn’t have impressed her that day. They played “Déjà Vu” which had originally been released in 1970 on an album of the same name. There were more than 80,000 at the show. Way more fans than the Indians saw at a game that year.
We have all been here before. It seems not much has changed in fifty years. That 70s show was not a good time for America. The inglorious end to a war in which our armed forces fought bravely. Intense political bickering with little getting done for the American people. Inflation rearing its ugly head. President Nixon resigning in disgrace. The market dropped more than 50% in 1973-74 and then went sideways until 1982.
It is tempting to assume a market crash is coming soon. We have all seemingly been here before and we wonder if the market of the 1970s is upon us. We’re worried about the Delta variant, the fallout from Afghanistan, political unrest and the onset of inflation. Yet—the market keeps making new highs. Market metrics remain positive. Déjà vu is a sense, a feeling, not an exact repeat. Listen to the market itself and don’t try to predict. Prudent Retiree will say once again that the market’s response to events, not our opinions, is what matters. Maintain your current equity allocations.
I’m a fan of the 1970s. I grew up then. Certainly, the best decade for music. I learned from the 70s what can happen when things go wrong. We apply those lessons today and stay vigilant about possible risks. At times, it’s tough. We will, though, follow what the market is saying. The song, “Carry On” on the Déjà Vu album tells us, “we have no choice, but to carry on.” We’ll leave you with that.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
Investing involves risk including loss of principal. No strategy assures success or protects against loss.
A market index is unmanaged and may not be invested directly.