New Year, Same Hysteria

Michael Anicito |

Happy New Year to you and your family. As I watch the recent stock market activity (better volatility) over the last couple of months, it strangely reminds me of playing recreational basketball. Sometimes when I play basketball I like to step back and look at what is going on as if I had never played the game or watched it before. In fact, most social interactions can seem alien in the same lens. But watching 10 men, especially those who are playing pick-up basketball, over the age of 40, can seem down right obtuse. 10 grown men lumbering around in an effort to fling a rubbery sphere into a metal cylinder with a mesh netting (if you’re lucky). When you sit back and watch, it is a disorganized scene. In pick-up games there are no set teams, no uniforms, no set plays. It’s a matter of matching up ability with some skill and competing with an intent to win. The only prize - you get to play again without waiting. Even at these primitive skill levels, one must try to make order out of the chaos on the court. One must find openings, close areas of space, be in the right position, and be patient. These are just some of the virtues that make up a competent basketball player.

A lot of these same virtues can be compared to setting order in one’s financial plan. When it all feels like pandemonium all around, specifically in the equity markets, you need to exercise patience, position, find openings, and be steadfast to the plan you have in place. The news media will present the next financial (and otherwise) apocalypse to you on a daily basis. Fear is an emotion sold to us that hits some of the most instinctive sensors of our brain.

Therefore, it is the job a financial planner to help his clients block out the fear and stick to the game plan. As an advisor to my clients, my responsibility is to keep you focused on putting the sphere in the cylinder. My goal as your adviser is to maintain the order during the chaos. Having a written plan in place, with stated values, goals, and time frames is essential.

Lest we forget, on average there is a 14% decline [1] in the equity market every year. Market losses are a temporary decline in a permanent uptrend. Reacting to daily market hysteria will lead to a breakdown of the game. Letting your emotions take over the plan will be devastating. You will no doubt lose.

As we usher in this new year, reflect on your plan. If you do not have one it is never too late to work with a professional to put something in place. Thankfully it has been my experience over the last 20 years at practicing financial planning, that with a plan in place most people can find some clarity to pursing their goals and dreams. It might take a little effort and sacrifice, but I assure you it can be addressed.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.


[1] Rusoff, Jane Wollman (2015, March 2nd) Nick Murray’s Hard Truths for Advisors (