LESSONS FROM THE PAST

I’m surprised by how often I reflect on the wisdom of my elders now that I’m advising my children on how to live and thrive. Some of their advice was…weird. 

One of them used to tell me to “blow my horn” when driving, regardless of the presence of another vehicle. Another, to “clean as you go” so that messes don’t pile up. Another still, to never put a good knife in the dishwasher.

Some was more relational. A friend that gossips to you will gossip about you. Don’t borrow trouble. By all means, write the letter/email/text when you’re upset, but don’t send it until you’ve slept on it.

Don’t interrupt, don’t look in someone else’s refrigerator, and don’t call after 9pm. Finally, if it takes less than a minute, just do it now.

Advice is the fruit of experience. Bad experiences make the best advice. Who among us hasn’t suffered the consequences of a bad decision, or struggled through unfortunate circumstances? What have we learned from these experiences?

We’re lucky to have the past to guide us, especially in the markets. This article by Dimensional Fund Advisors gives us not only the significant market events of 2022, but reason to believe that “patience and persistence” will provide the best outcome:

“A look back at recent history makes a case for sticking with a plan. Handsome rebounds after steep declines can help put investors in position to capture the long-term benefits the markets offer. Those who sold their stockholdings during the dot-com crash in the early 2000s wouldn’t have been in position to enjoy the equity recovery that eventually followed.

Similarly, those abandoning a plan early in the 2008–09 financial crisis, or in March of 2020 as COVID fears spread, wouldn’t have benefited from the subsequent rallies. As we look at prices that in some cases are well off their highs, it’s helpful to keep history in mind entering 2023. That’s the definition of thinking of investing for the long term.”

Something my Sicilian grandmother used to say seems to apply here: “that’s just life, honey”. Maybe it’s just a platitude, but there’s so much wrapped up in that little snippet. Everyone struggles, you’re not alone. Don’t worry about what you can’t control. Don’t overreact.

This is a great mantra for market worries. Handling our fears like Memaw should help us stay the course when we’re tempted to jump ship.