Over the past few weeks, I have taken Francis to a preseason football game and basketball game. As many of you know, the preseason games are “practice” games with no win/loss effect on the regular season. Traditionally, the rosters are bigger, and the coaches have the opportunity to see how players perform and try out new plays and schemes. Many times, these games lack real intensity and the star players do not participate much, if at all. However, to a five-year-old, all he knows is he went to an NFL and NBA game.
As I sat in the stands with Francis, it seemed as if everyone was in preseason mode. The fans were finding their new seats and barely cheering, concessions stand lines were long with new items being released and even the mascots and cheerleaders were trying new routines. I’m sure if we went back to the Cardinals game this weekend, everything would be running much smoother.
Now, in sports, the preseason is great for the teams. They can try and get the kinks out, however, in one’s financial world, you really do not get a preseason. Be it preparing to retire or selling a business, it is pretty much the Super Bowl or game 7 of the NBA Finals. You need to have already done the hard work which means the plan has already been created.
Just like in a game, you can and do make changes as your life changes, but traditionally, you do not retire from a long-term career or sell a business twice. Unlike Michael Jordan who had 25 game-winning shots or Tom Brady who has 50 game-winning drives, there is no next game for us. However, be it Jordan or Brady, they have practiced the plays and scenarios countless times before the games so as they are prepared for the moment. Through our over 50 years of experience with generations of families, we have many ‘game-winning’ drives (strategies) to help them try and accomplish all that is important to them.
As you may recall, last month we spoke about the S&P 500 not experiencing a 5% pullback at any time during 2021. Well, it took nearly a full year, but the S&P 500 did experience the 5% pullback this year. As the chart below shows, pullbacks occur nearly every year, even those years where the market has outsized gains.
As we enter the fourth quarter of what has already been a strong year, history shows markets tend to continue to perform strongly, however past performance is no guarantee of future results.
Just as the fourth quarter of a football or basketball game can be a quarter of increased pressure and worry, the economy and markets can also see increased worry (The Fed, Washington) and volatility. However, staying true to the game plan and long-term goals, will help us weather any potential storms.
With the weather seeming to have changed, enjoy the new season, and talk with you soon.