fi nancialforum Ignore the Gloom M
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Many investors worry about what to do with their investments given national and world aff airs. Why? Afghanistan, ter- rorists, global economies, Ebola, politics, stock exchange correction, infl ation pre- dictions, interest-rate predictions — the list goes on and on. But should you adjust your investments to account for all the turmoil? No. Stop listening to the media doom and gloom in the context of your investment strategy. No one knows the future. But what we do know is history and the eff ects of past signifi cant events. The headlines we face today are no diff erent and no worse. Mankind perseveres. Consider the following examples. Financial crises: Back in 2008, the fi - nancial sector of our economy threatened to collapse. The stock market lost over half its value from October 2007 to March 2009. The dot-com bubble of 2000 to 2002 led to a drop of almost 40 percent. But this wasn’t something new. The U.S. also faced the 1930s’ Great Depression, the recession of the early 1970s, and the infl ation of the late 1970s and early 1980s. Ebola: More than 25,000 cases and
more than 10,000 deaths — the vast major- ity in West African nations — have been reported in the current Ebola epidemic. But to put that into perspective, the fl u pandemic of 1918, the deadliest in modern history, infected an estimated 500 mil- lion people worldwide — about one-third of the planet’s population at the time.
48 MILITARY OFFICER JUNE 2015
Current national and world aff airs have some investors wondering whether they should plan for the turmoil. By Lt. Col. Shane Ostrom, USAF (Ret), CFP®
It killed an estimated 20 to 50 million people. Of the U.S. population, 25 percent became sick, and some 675,000 Americans died during the pandemic. War: The nation’s military has been serv- ing in current confl icts in the Middle East for more than a decade. But the history of U.S. war involvement spans two centuries, including numerous modern-day confl icts. Additionally, since 1960, there has been an assassination of a president, an at- tempted assassination of a president, an assassination of a high-ranking government offi cial and presidential candidate, and murder of numerous civil rights leaders. In total, four U.S. presidents have been killed. There are always new technologies,
new levels of productivity, health break- throughs, and better methods of food pro- duction. Everything you know today will be diff erent in 30 years. Here’s what you should count on:
all markets are up and down over short terms (less than 10 years); markets are always up over long terms; and trying to second-guess world events and market movements is a losing proposition. The point is, follow the proven invest-
ment strategies for your objectives and forget about outside events.
MO
— Lt. Col. Shane Ostrom, USAF (Ret), is a CFP® and benefi ts information expert at MOAA. Visit
www.moaa.org/fi nancialcenter for other re- sources. Email specifi c benefi t and fi nance inqui- ries to
beninfo@moaa.org.
PHOTO: SEAN SHANAHAN
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