Have you ever ridden the Tornado-like amusement park ride where you stand against the wall and when the ride takes off it spins in circles so fast you defy gravity while your view appears to stay still in one central blur? It’s been well over 30 years since I’ve ridden this ride because, quite frankly, just writing about it makes my stomach turn. When I look back on the market for the past four months, this ride seems to emulate what we have been through much more accurately than a roller coaster (a typical comparison for the stock market).
Much like the eye of a storm, we all stood still for a moment while chaos seemed to swirl around us. Activities ceased while we all rediscovered time at home. There have been many times a lot of us have wished for a month at home. And, in many ways, it was exactly what we were looking for—a time to catch up on home projects, spend time with immediate family, catch up on reading or complete a puzzle. For my family, it was valuable time spent with our teenage children. Dinner together, games and shared memories don’t come along every day.
Anxiety also existed in the midst of all of this—the amusement park feelings invoked by the fear of sickness, uncertainty of job status and yearning for time with relatives and friends who do not live under our roof. This unstable feeling could not be illustrated better than the chaos that ensued with racial tension and riots during this uncertain time. Human feelings are an interesting phenomenon. It is very difficult to sit in the eye of a storm and not do anything.
As we emerge from the shelter of the storm we need to look at rebuilding. We assess the strengths of the economy, our personal strengths and the pieces we have around us to put them all together. This may mean rethinking our career, work/life balance or recognizing where we want to spend time in general.
The chart below is the price of the S&P 500 index from December 31, 2019, through July 2, 2020. While it looks a lot like a tornado that has touched down, it also shows a path of recovery that can come for all of us as we rebuild following our moment of stillness.
The S&P 500 achieved a positive 19.95% quarterly return, to mark its best second quarter return in history. As we have discussed, the stock market is forward looking. While we may remain in the throes of rebuilding, we can be optimistic that the pieces are coming together. The sun is peaking through the clouds following the storm.
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