Insights & Media

In September the days grow shorter, the nights are cool, and the stock market gets crazy. The first two are easy to explain but the third is a mystery. However, this year was a good example. In the last ten days of September the Dow Jones Industrial Average had four moves of greater than 500 points. That compares to only three such moves in the previous four months. Clearly traders came back from summer vacation ready for action.

Our family owned a cottage for 12 years. Our kids were little and we used it a lot, four seasons a year. Then, as happens, our kids grew up. They started going to camp in summer and had hockey or swimming or other activities in the other seasons. By the end, I was going up by myself to cut the grass in summer and get the snow off the roof in winter. We sold out more than twenty years ago.   Do we miss it? Sure. The sunsets over the lake, the joy of jumping into the cool water, the pure pleasure of canoeing on a windless day. Can’t beat it. But things have changed. We paid less than $100,000 for our place. Now, the same property would likely go for close to $1 million. Would it still make sense to buy?  Here is some advice I gave to a client who asked us just this question. 

In the early 1720’s, exactly 300 years ago, all of England was overtaken by a surge of stock market speculation which we now know as the “South Sea Bubble”.  Ignited by a monopoly granted by Parliament to a company to trade in South America, all manner of companies suddenly were brought to the market, and their shares were purchased with wild abandon by all and sundry. Two strong emotions ruled; today we call them “FOMO – fear of missing out” and “YOLO – you only live once”.  No idea was too bizarre and no scheme too outlandish.