I’ve been afraid of power tools my whole life. Not sure exactly why though. I’ve never had a bad experience with one, unless you count the time I crashed a riding lawn mower into a brand-new red Corvette. Did I mention the Corvette was parked at the time? The mower didn’t have a horn so it really wasn’t my fault…
So, today was a big day. I operated a chain saw for the first time and I loved it. It was definitely an emotional breakthrough for me.
If you haven’t guessed by now (why would you from my opening ramblings?) this newsletter is about fear. Unfortunately, unlike Franklin Delano Roosevelt, who famously said, “All we have to fear is fear itself,” there are plenty of issues in our world today of which to be fearful. So many in fact, that I’m not sure I could list them all. What I really want to focus on in this edition of Willingdon Views is how we might overcome a few of these fears.
Fear of a bear market… We are in the 10th year of the bull market that began in 2009. The stock market has NEVER gone up 10 years in a row. It has gone up 9 years in a row twice (1991-1999, and 2009-2017) therefore, a correction is overdue. Currently, our equity portfolios are positioned defensively, putting us in relatively good shape to weather a market correction.
Fear of a political meltdown… I’ve written many times about how dysfunctional the bureaucracy in Washington has become, and although it can be painful to watch, things do get accomplished. Given the polarization in our country, we really can’t expect smooth sailing on any political issue, be it a Supreme Court confirmation, trade negotiations or interim elections. Perhaps, we should just add these and other workings of the federal government to the list of things you don’t ever want to watch being made. That list now includes sausage and legislation…
No matter how much we may be frustrated about our political process, it is the best system ever devised to promote human flourishing and individual liberty. It’s far from perfect, but it’s proven to be better than all the alternatives.
Fear of moral and ethical decay… I think about this a lot. Maybe too much. It’s complicated because there are so many diverse opinions about a multitude of related issues. Unfortunately, I have way more questions than answers. What does God think about our stewardship of the earth? Why can’t we find political leaders at the national level who are honest? Will America go the way of the Roman Empire and eventually destroy itself? How we answer these and other moral and ethical questions may not impact our lives, but they will impact the lives of our children and grandchildren. I hope that at some point soon, leaders will emerge on the national stage who have sound core values, and who have the courage to live by principles like integrity, loyalty, selflessness, and old-fashioned hard work.
Fear of getting old… Most countries in the developed world have a demographic problem.
Their populations are aging and there aren’t enough young people to replace them or to provide the tax revenues to fund retirement benefits. America is not immune from this dilemma. Our children are unlikely to receive the same social security benefits seniors receive today. The potential for a wealth tax is not small. Universal health care, which, in my opinion, would have more negatives than positives, is a possibility. All these strains and challenges to our society and economy are often made worse by inefficiency and political corruption, intertwined with an ever-growing administrative state. As we age, we naturally lose control and individual freedom. Relying on the federal government to “fix everything” exacerbates this process.
Effective, principled leadership is vitally important if we are to solve these and other challenges. It is also our best hope, over the long term, to balance individual rights and responsibilities, while making government work more effectively for the people and not as an endless source of power for political and corporate elites.
Fear of never making a difference… I’ll give the last word to John F. Kennedy – “One man can make a difference, and every man should try.”
Michael Kayes, CFA