Some summers are longer than others. When the number of 100-degree days exceeds 7-10 in a summer, fall can’t come soon enough. Now we all know that summer is actually the same duration each year, but when we are uncomfortable time seems to stretch on interminably.
Speaking of fall (is it fall yet?), we are expecting our first grandchild in September! My daughter and son-in-law have decided we should all wait to find out the gender when he/she arrives. We are also planning a wedding for my second daughter this October. So how can it be that I am both dreading the next few weeks of hot weather and excitingly looking forward to the events ahead?
Surprisingly, the calendar can be both an unstoppable force and an immovable object – and sometimes it’s both simultaneously.
Where has the calendar brought us recently? In mid-June, the S&P put in a low around 3600 (from a high of roughly 4800 in January). Over the last couple of weeks, markets have rebounded due to some help from quarterly earnings coming in better than the worse case scenario that many pundits were expecting. And last week, once again, the Federal Reserve raised interest rates by 75 basis points. What do all these things have in common? They were all scheduled on the calendar. And we had to wait to learn them.
Looking forward, we need to wait to see if the rate hikes continue to bring down inflation. Many commodity costs have dropped back significantly in price over the last several weeks. Wage inflation has slowed some, mortgage applications have cooled, and new unemployment numbers are showing a decline in some hiring. All of this may be pointing to a softer economy that isn’t creating as much inflation as feared. But we will need to let the calendar do its thing to find out how it all progresses.
Waiting is not something I do well. Whether I’m excitedly waiting for a wedding or a grandchild, the calendar is in charge. Of course, the opposite is true as well – if I’m dreading tax season, a surgery, or perhaps paying for that wedding – the calendar is in charge.
History teaches us that successful investors use the calendar to their advantage by staying invested over a longer period of time. Most have performed very well. Staying invested over time is in fact the simplest (but not always the most pleasant) way to achieve the long-term average we all seek.
As the year moves forward, we will continue to look for ways to use what the calendar gives us to your advantage. So, my best advice is to take each day as it comes and don’t fight the calendar. It doesn’t care what you think about it anyway.