The Stock Market Shown Through My Daily ActivitiesSubmitted by Moneywatch Advisors on April 7th, 2020
My pre-Covid days went something like this: I would start my day with a run in my Asics running shoes (stock ticker symbol: ASCCY) and some Nike gear (NKE). I would then shave using a Harry’s razor (EPC) and Gillette shaving cream (PG) and almost always shower, using Ivory soap (PG). After a bowl of Wheaties (GIS) while reading the New York Times (NYT) and the Herald-Leader (MNI) I’d hop into my Accord (HMC) and head to my neighborhood Starbucks (SBUX) where I’d invariably see friends in front and behind the counter. During my 3-minute drive to the office I’d turn on ESPN radio (DIS) and, once there, I’d check the Wall Street Journal (NWS), Facebook (FB), LinkedIn (MSFT) and Twitter (TWTR) – some on my iPhone (AAPL) and some on my desktop computer (DELL).
While at the office I’d keep track of client accounts through TD Ameritrade (AMTD), Morningstar (MORN), Value Line (VALU) and others. I might pop out for a lunch meeting at Olive Garden (DRI) and while out grab gas at Speedway (MRO) or something at Home Depot (HD). Or, I might walk home and grab a sandwich from groceries purchased at Kroger (KR). Back at the office it wouldn’t be unusual for me to purchase a book on Amazon (AMZN) using my American Express card (AXP) where it would be shipped via UPS (UPS). I might even plan some travel flying Delta (DAL) or Southwest (LUV) and maybe staying in a Holiday Inn Express (IHG) or Marriott (MAR) and renting at Hertz (HTZ).
In the evening Lisa and I might enjoy some Woodford (BF-B) while cooking something on the grill (WHR). Later, our LG TV (LPL) is perfect for streaming movies and series through our Roku (ROKU) on Netflix (NFLX), Amazon Prime (AMZN), or Sling TV (DISH).
Although shaving is, ahem, done more sporadically than before, many of these activities still continue daily. Through our social distancing efforts other activities are clearly on hold – Delta and Marriott, for instance – but will spring back when appropriate.
That’s why, typically, the stock market rebounds before the economy does. The stock market is a measurement of what investors think will happen in the future. When an investor buys a share of stock of a company, they are buying a portion of the future earnings of that company. Investors can see the light at the end of the tunnel before they actually reach it.
The stock market downturn amid the Great Recession of 2008-09 is a good example: the stock market started to recover in March, 2009 while the economy didn’t show signs of life until June of that year.
We do not know when the stock market will start to recover but we do know that investors have endured downturns and volatility before and those that persevered were rewarded.
Steve Byars, CFP®