Here’s an excerpt from a magazine I have. The title is: A Gloomy Feeling
Wall Street was baffled. The market’s 18-month slide had brutally bent the Dow-Jones graph, ending with one of the worst one-day drops. The dollar loss on paper was actually three times greater than that of the ’29 crash.
The market’s prolonged drop has reflected a growing conviction that the Administration has not coped with a troubled economy. Recession and increased unemployment has left people with less to spend on everything.
The Dow-Jones average has decreased 36% in stock values. The averages, like the Dow-Jones, tell only part of the story. Since they are based on the prices of the blue chip, they hardly hint at the depth of the crash.
This is a far cry from the from the bull market bedlam of just a few years ago.
What is interesting about this article is not its content, but rather the date of its publication. This is from a Life magazine dated June 5, 1970. At that time, stocks plummeted 36% from 985 to 631.
Markets go in cycles. Since 1970, we have had several other economic downturns. Of course, knowing this does not reduce the pain that so many are feeling now.
Economies are, in many respects, self-fulfilling prophecies. When people feel the economy is bad, they stop spending. They start to pull their money out of the stock market. As a result, company profits decrease. Companies then lay off employees, who in turn start spending even less. And the downward cycle continues.
Unfortunately, with things are bad as they are, people become quite pessimistic.
In troubled times, it is useful therefore to reflect on a study done by Sonja Lyubomirsky, a psychologist at U Cal Riverside. She studied the relationship between happiness and success and observed that, “Happy people were not necessarily happier after their success than they were before, but they tended to be happier than others who were less successful.” She concluded that, “Success is related to happiness – but as a consequence, not a cause.”
In other words, happy people attract success.
I am reminded of an old joke. What is the difference between a pessimist, an optimist, and an entrepreneur? The pessimist sees the glass as half empty. The optimist sees it as half full. The entrepreneur sees the glass as completely full; we just need to get rid of the excess glass. As an aside, a scientist would also say that the glass is completely full; it is half filled with water and half filled with air.
What do people value? It’s not the glass, it’s the water. The size of the glass is irrelevant. In fact, too much glass can be a detriment (as evidenced by the photo left).
Interestingly, I never thought of the stock market as an investment. I always viewed it as a gamble; a casino with (hopefully) better odds than Vegas. I can’t predict which products/services will be successful (neither can anyone else). And I have little say over what companies do with the money I invest.
My best investments are those that impact me directly – investments in my business, my education, my relationships, and my health. Those always pay dividends.
Now is the time to take control. Create your own self-fulfilling prophecy. Stay positive. Get rid of the “excess glass” in your life or business. And make the safest investment you can: invest in yourself.