Alan Steel
01506 842365
MENU
  • Home
  • About Us
    • Close
    • About Us
    • What We Do
      • Close
      • What We Do
      • Our Services
      • Our Philosophy
      • Our Awards
      • Our Reputation
    • Who We Are
      • Close
      • Who We Are
      • Meet the team
    • Our Approach
    • Financial Planning
  • Testimonials
  • Investments
    • Close
    • Investments
    • Investment Advice
    • Portfolio Building
  • Pensions
    • Close
    • Pensions
    • Retirement Planning
    • Early Retirement
    • Pensions as simple as...
  • Tax
    • Close
    • Tax
    • Tax Advice
    • Tax Planning
    • When I'm Dead and Gone
    • Inheritance Tax
    • HMRC Digital Accounts
  • Insights & Media
    • Close
    • Insights & Media
    • Letters from Linlithgow
    • Informing You
    • Letter from America
    • See us in the Press
    • Master Investor
    • Points of Few
  • Contact Us
Independent financial advisers founded in 1975
Over £1.4 billion client funds under management
17 industry awards for advice since 1989

By Mike Williams, Genesis Managing Partner

Founder and Managing Partner of Genesis Asset Management, New York

Letter from America

How to Lose Money and Be Influenced by Crowds

By Mike Williams | Friday, 20 November, 2020

“I will love the light for it shows me the way, yet I will endure the darkness 

for it shows me the stars.” 
- Og Mandino

When we say markets don't care, it doesn’t mean we don’t.

We care about the impact of this virus and the crazy multitude of shutdowns going on. 

But because it has taken on some spectacular political and media-driven twists, we’ve opted to focus more on the “black and white” nature of the markets.  

That’s what will keep investors out of the abyss – like the tens of thousands who, out of fear and confusion cashed out of their long-term plan in March and April of this year.

They allowed fear to completely engulf their outlook. 

And while it’s an understandable reaction, it’s also a lesson that has been repeating since market records began. 

People think "now." 

Markets think "next."

People think "good or bad."

Markets think "better or worse."

It’s a head-spinner at times. But if you want to acquire wealth through investing you need to know that:

  • Time and patience permit the magical wealth effect of compounding to happen, and 
  • Fear drives actions that permanently interrupt that effect.  

Folks, financial media headlines and political talking heads will leverage fear against you in order to gain your buy-in and support.

The system has been formed to demand that the next monster feel cataclysmic when compared to anything before it.  

But the stage is set for more surprises - good ones - to the upside. 

Now think about some of yesterday’s monsters that we were told to be afraid of. 

Remember Brexit? You’d have thought someone had erased the entire European continent.  

And before that it was the sheer terror associated with "China letting the yuan fall." 

Then of course, it was the 2016 "election nightmare." 

Don’t forget the China Tariff War.  

It was always going to be the end. Until tomorrow’s monster was ushered in.

Which brings me on to today’s mother of all world-ending scenarios: A global pandemic.

Folks, we are going to get through this. In fact, you may have noticed that the market and the economy basically already have.

And for those whose reprise is that this is just the “Fed printing money again,” think back to the hundreds of thousands of investors back in March 2009 who were so incensed by that idea that they refused to support it by risking their money in the markets anymore.  

That was back when the Dow Jones was roughly 6,700.

Now it’s about 29,500.

Talk about a wealth building decade-long opportunity missed!

Read 'em and Reap

Lots of things are showing us how the recovery is coming on strong.  

Don't be surprised if we see a couple back-to-backers of annual returns in the double-digit realm – and maybe even more frequently than back-to-back:

Notice that as the annual return a year ahead tends to improve, the broader the rally gets - and we are seeing just that as November really lit the torch of seeing through the fog and into the new US economy ahead.  

Let's Dig Under the Media Fear

We saw earlier in the week how strong Manufacturing is returning to the US with orders books and extremely positive backlogs.  

Here’s another extreme we have been suggesting you count on for years – that we’re running out of houses to buy, and the builders are absolutely filled up with demand for many years to come:

The term "Off the Charts" really isn’t an overstatement here.  

And this cycle is just getting started! 

Oh, and keep in mind that back in March 2009 how real estate was the deemed the culprit of all our problems. The experts said: "We will never sell all the homes we have available...."  

This isn't your Dad's housing market anymore:

Industrial output recovery is real. 

Order backlogs are at record highs:

It’s Stunning....

Don’t underestimate what’s unfolding in the US economy.  

It can’t be hidden by rampant and terrifying media headlines.  

Positive change is happening so fast it can be a blur. 

©2023 Alan Steel Asset Management Limited is authorised & regulated by The Financial Conduct Authority. Please note that the Financial Conduct Authority does not regulate some forms of tax advice. Company Registration: SC58014

You should remember that the value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.

The investment services and/or investments referred to in this website may not be suitable for you. If you are unsure we suggest you contact us to discuss matters further. If we believe our services are not right for you we will tell you.

When investing money, whether for income or growth, you are placing your capital at risk as the value of investments may vary, so you could get back less than you started with.

The Financial Conduct Authority does not regulate Tax Advice, Trusts or wills. Alan Steel Asset Management Limited is authorised and regulated by the Financial Conduct Authority. The guidance contained in this website is subject to the regulatory regime of the UK.

The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients.

FOS details can be found at www.financial-ombudsman.org.uk

Alan Steel Asset Management Limited are not responsible for the content of external sites.

  • Cookie Policy
  • Privacy Policy
  • Website terms and conditions
  • Tax Services Privacy Notice
  • Contact Us

This site uses cookies. By using this site you agree to the use of cookies. Read our Cookie Policy