If you had been a member of the Continental Congress between 1776 and the unusually cold Valley Forge winter of 1778, you grew familiar with the field reports of General George Washington. They were factual and often bleak. He detailed losses, the need for supplies and urgent funding requests. Members of Congress complained that Washington’s reports were depressing. Didn’t they already have enough bad news? Now here comes the leader of the Continental Army with his litany of military woes.
The Congress wanted good news, but Washington understood that great victories required overcoming great struggles. So he gave them the facts and he detailed a strategy to navigate the harsh winter. Importantly, he never lost sight of an ultimate victory.
Washington’s message boiled down to one simple thought: We know what needs to be done, so let’s rally, stick to the plan, reinforce and persevere.
Today’s investors should take note: There is a lot of depressing news in the market these days. They are hungry for good news. They want to know the frost will melt and we can get about the business of moving forward. Instead, the news from the field is that “US equities continued the downtrend in September amid US Federal Reserve’s 0.75% rate hike and higher than expected inflation data. For the month, Dow Jones lost 8.8%, S&P 500 fell 9.3% and Nasdaq ended 10.5% lower. The S&P fell 4%, its largest single-day loss of the year, on September 13 after data from the Labor Department revealed that consumer prices rose faster than expected in August, with investors expecting further rate hikes from the Fed as it attempts to bring down inflation.”
True, the economic winter of this moment is cold. Discouragement is in the air. But we have good reason to believe that the tried and tested strategies will win the day if we persevere. Importantly, we should have great confidence that the sun will shine again. Our job is to help us navigate this moment en route to future blue skies.