Records are being set in the Holiday Season, and lost in the headlines.

And consumers seem just a tad nonplussed by all these suggestions of tariff wars which, at the current levels of 10% on $250 billion in goods, represent just $25 billion in annual costs.

That’s almost like a clerical error in an economy running at nearly $21 trillion.

And the weekend news arrived as suspected; a platform by which both countries could call a "pause" in the process of nasty headlines back and forth. 

Call it a negotiation. 

A Little Bit of Patience?

Sure, as investors we need to be patient. There will likely be lots of trade activity now in the markets, and with it the red ink will flow.

Just don’t be shocked by the bumps as ahead as agreements are orchestrated and the media band plays on.

The tug of war will likely continue for a few weeks longer, and we should expect the consensus of sentiment might prefer that the bearish chatter and dramatic headlines were true.

So, don’t be swayed if the big "ups at the opens" are shaved through the course of each day.

Things are moving in the direction that long-term investors want them to.

Stark Reality

Stepping back a bit and gathering some perspective might reveal that this current ebb and flow is little more than a white cap in the ocean.

Bear with me (at the time of writing):

  • Dow Jones - Recent Highs:           26,828
  • Dow Jones - Futures right now:     25,986

The difference is 832 points.

Put another way, how many months in the history of the stock market has there been a higher closing level than where November closed?

Answer: 3.

And I suppose this could be the beginning of the end. But do you really believe that door is going to close while everyone is predicting it every day…in detail.

Think about it: Had any recession or collapsed ever unfolded like that before now – where everyone knew exactly when it was coming?

Answer: No. Not even close.

Has there been angst? Yep. You could make that case in terms of percentages and in other averages that are further away from their highs and need to work back up. 

But in the end, as the dust slowly settles over the coming months on yet another Armageddon window, we’re light years away from the end of the world as we know it - economically or otherwise.

Change the Channel

The less you listen to the "news" the better off you will be.

In the future, the numbers are set to get substantially larger. And there will be a time in the future when that difference above will have a "0" added on the end.

And it won't be a very big deal then either. 

There Is Some Good News…

What happened to all that chatter about concerns over growing "Animal Spirits" just two months ago? It sure disappeared quickly, eh?

Perspective is a funny thing. 

Consider that, over the next 3, 5, 10 and 20 year periods, we will likely find ourselves looking back on the haze of Q4 2018 - going into 2019 - with a largely different understanding than we have today.

What has felt more like a long walk through a vast field of quicksand, with a market that has effectively been stalled, will then be seen as more like a pause in the action; a foundation for a new platform and launch pad for the exciting years ahead.

History suggests this choppy tug-of-war is the start of good things and a turning point for the better, driven by the largest economic event to ever hit the United States.

Fast & Furious Change

Technological development is being unleashed at a pace never before witnessed. And that process alone is stirring even more new ideas; expanding insights and transformative structures that seem to be born every second.

While scary, change is full of opportunity:

Market MOves Chart

And fear spikes are always a part of the landscape.  Without them rates of return would fall.

The two purple highlights on the chart above show you more about structure - how each lengthy window serve a purpose in the never-ending pathway of the markets. 

We are setting records in almost every financial metric denoting economic success.

Corporate entities have never collectively been more profitable.

Growth is always tough to build – and in this window it’s no different.

Consumers have never been healthier…and they have a $14 trillion (cash on deposit) rainy day fund to boot.

The only problem with this fear-mongering roller coaster media ride we’re on is that it takes about 25 years to get the hang of it.

But tough work is never fun.

If it was not very tough at times on the investing pathway ahead - as we climb the mountain together into the future - then there would be no rate of return available either.

And where’s the value in that?

Mike Williams
Founder and Managing Partner of Genesis Asset Management, New York