Four Decades of Perspective

These days we are seemingly under attack by a 24 hour a day news cycle in all forms of media. We all seem to know what happened yesterday and today, but can hardly remember what may have occurred as recently as last month, let alone 6 months ago. This is particularly noticeable in the reporting from the financial press. Every day there is an analysis in the media on why stocks may have increased or decreased and everyone gives an opinion — whether we ask for it or not.

In one particular week we actually tracked financial headlines. Would it surprise you that on days when the market was down, the overwhelmingly majority of news headlines were justifying why — AND proposing all the reasons why it was only going to get worse? Then on days when the market was up, the news was exactly the opposite. Can the dynamics of a global economy REALLY change that much in the course of 24 hours???

Of course not. In fact, we know that it gets old to continuously be told stay the course because that can take on many different connotations. To some it may imply we’re not sure what to do, so let’s do nothing. At Triune, we simply mean to stick with a well thought-out and highly customized plan that was put in place long before things got volatile.

Triune has intentionally constructed your financial plan and investment portfolio and tied it to YOUR goals and timeframes. We know that this will serve you well. To put things in perspective, here’s a look back over the last 40 years. See if you notice any patterns supporting our approach.

1975

Saigon falls; President Ford escapes two assassination attempts, Saturday Night Live debuts, and U.S. and Soviet spacecrafts link in space.

  • Global Population: 4.1 Billion, half of whom live in extreme poverty
  • U.S. Population: 216 million
  • U.S. Real GDP: $5.49 Trillion
  • S&P 500-Year End Close: 90
  • Earnings: $7.71
  • Dividend: $3.73
  • US Postage Stamp: 10 cents

1985

Gorbachev comes to power in the Soviet Union and meets with President Reagan. Internet domain name is created. “We Are the World” is the song of the year. K.C. Royals win the World Series.

  • Global Population: 4.85 Billion
  • U.S. Population: 238 million
  • U.S. Real GDP: $7.71 Trillion
  • S&P 500-Year End Close: 211
  • Earnings: $15.68
  • Dividend: $8.20
  • US Postage Stamp: 22 cents

1995

Oklahoma City bombing is the greatest domestic terrorist atrocity in American history. OJ Simpson trial ends in acquittal after 10-month trial. Rock & Roll Hall of Fame and Museum opens in Cleveland. Jerry Garcia dies.

  • Global Population: 5.7 Billion
  • U.S. Population: 266 million
  • U.S. Real GDP: $10.28 Trillion
  • S&P 500-Year End Close: 615
  • Earnings: $37.71
  • Dividend: $14.17
  • US Postage Stamp: 32 cents

2005

Hurricane Katrina devastates the gulf coast. Saddam Hussein goes on trial. July 7 becomes London’s 9/11 as coordinated attacks on the bus and subway system claim 52 lives. Pope John Paul II dies; he will be canonized nine years later.

  • Global Population: 6.5 Billion
  • U.S. Population: 296 million
  • U.S. Real GDP: $14.37 Trillion
  • S&P 500-Year End Close: 1,248
  • Earnings: $76.45
  • Dividend: $22.38
  • US Postage Stamp: 37 cents

2015

A radical Islamic faction, ISIS, casts the Middle East in chaos and carries out terrorist atrocities in Paris and elsewhere. The world’s leading nations reach an accord with Iran on its nuclear development program. Yogi Berra dies. K.C. Royals win the World Series.

  • Global Population: 7.29 Billion, less than 1 in 10 live in extreme poverty
  • U.S. Population: 322 million
  • U.S. Real GDP: $16.39 Trillion (through 9/30/15)
  • S&P 500-Year End Close: 2,044
  • Earnings: $116.89
  • Dividend: $43.12
  • US Postage Stamp: 49 cents

Four decades of perspective

  • Global population is up nearly 80% and those living in extreme poverty have dropped from 50% to 10%.
  • US population is up by half through new births and immigration and holds a hundred years’ worth of hydrocarbon energy reserves.
  • Real GDP has more than tripled, meaning the real GDP per capita has soared
  • The S&P 500 rose more than twenty times, on an earnings increase of over fifteen times and a dividend boost approaching twelve times. Consumer prices (inflation) increased slightly more than four and a half times.

Surely this is the greatest accretion of real wealth by the greatest number of people in the history of the world.

The megatrends underpinning this economic and financial progress are the spread of the free market and the exponential progress in information technology. Global economies, capitalism and the capital markets of the world should always give us encouragement, despite the headlines of the day.

Now some of you might be saying, “That’s great. But I don’t have 40 years of investing life left. My investing timeframe is much shorter than that!” Here is some encouragement:

Your portfolio has been intentionally structured with low-volatility assets such as cash and/or bonds to stabilize and reduce the affects of volatility. This allows you to obtain the long-term benefits of global capitalism (i.e. owning stocks) without being forced to liquidate them in the midst of a down market in order to meet shorter-term withdrawal needs.

The investing time frame is usually longer than what you think. Traditionally, you may have thought of our investing timeline as retirement age. However, rising life expectancy now means that many people will spend as long in retirement as they did in the workforce! Therefore your portfolio simply must contain some allocation to stocks in order to keep up with enemy #1: inflation.

With Triune, know that our investments are headline proof. No matter how the press spins events in the economy, your portfolio is designed to harness the power of prosperity as it reaches greater numbers of people and markets. Of course, we relish the opportunity to discuss this further with any of you. Please reach out to us if you have any questions.

Thank you for allowing us to be your Partners in Conversation.