The Only ‘Indexes’ That Matter

There’s little doubt about the number of things being offered up by the media for us to worry about.

But suggesting anyone can predict any of their immediate outcomes is pure fantasy, and thus a waste of our time and energy. 

And when the horizon seems to be enmeshed in one problem after the other, I tend to look backwards.  

Think about it for a moment: “How many things have we gotten over in the last 35 years? All those horrible events from around the world, and yet here we are at record highs in almost every important and measurable financial metric?”

What that says to me is: “Bring on more problems for us to solve..."

"Disruption" is the New Good Morning

In the midst of all the turmoil proposed by the headlines, there is also a resounding message that we should be aware of and acknowledge: Everything is changing. 

And disruption good for you (though nerve-wracking at times).

Folks, there will be no such thing as "growth" investing in the years ahead that’s not very heavily weighted in tech companies; from cloud, to services to hardware and connectivity.  

The list is endless. 

Anything short of heavy tech weightings for "growth" portfolios will likely appear to "lag" the growth indices, a dependency that might throw many of you off your path.

To that last point I would add this slightly uncomfortable thought: Since the tech bubble breakdown of 2000-2003 (hard to believe that was over 15 years ago now), the investor audience has come to associate “tech” with “risk”.  

This will continue to be a hindrance in the future - Tech's values over the next 5, 10 and 20 years will make the 2000 levels look like a tiny little wrinkle in the chart.

Mind you, it will not be without extreme setbacks along the way, but the mountain ahead is set to be significant.

Do NOT allow your brain or your emotions to limit your confidence when you hear the terms "disruption" or "volatility" ahead.  

They are both here to stay - and in later years - the odds are extremely high that you will be thankful for it.

So long as your lifestyle, your wishes, your family needs and your longevity goals are being productively met, then you have already "beaten" the only indexes that matter.

Meanwhile...

While the media wants you to think all is bad today, tomorrow, next week and 5 years from now, and that it’s merely a matter of degrees and timing as to when the world ends in a fiery ball of flames, consider that this has been going on since the beginning of time.  

It’s not the case that bad things have all of the sudden started happening.  

It’s because we didn’t have 173,617 sources of media information coming at us 24/7 and raising each in turn to apocalyptic status in the name of commercial imperatives.

And if you think I’m kidding about this then check your history. Indian tribes killed other Indian tribes to take control of land they wanted long before Columbus arrived in America. They just forgot to video tape it all and post it to YouTube, Instagram and Facebook. 

While some will mistakenly focus on the end of the world as we know it somewhere between tomorrow at 8am and 12 years from now, generally speaking, things are going along pretty much like they have for decades.

Scott Grannis of the Calafia Beach Pundit website has some great charts (as always) to help cut through all the junk out there:

There’s much, much more if you look for it, and permit yourself to relax about the future and let your more productive thoughts (and actions) rise to the surface: 

• The blue lines (above) tell us that households are doing fine.
• The green lines tell us that 401K's are doing fine. 
• The red lines tell us that real estate holdings remain very close to where they were years ago.
• The purple lines tell us the "debt" bomb fears have been exaggerated to an extreme level

Allowing the noise from the headlines to sneak in and steal those facts from your thinking will only result in poor, fear-based actions ahead for most.

Find the process you trust, folks, and keep in mind the indexes that really matter.

Because without that comfort the resolve required for success in long-term wealth building will snap in any harsh winds.