Glass Half Empty
Undergoing chemotherapy as a child, I constantly received compliments on my optimistic outlook. Every Wednesday, when I arrived at the Children’s Hospital of Philadelphia (CHOP) for my weekly cocktail of drugs, my nurses, doctors, and child life specialists commended the smile on my face and my ability to recognize the delayed gratification of treatment. We all knew I would have a gnarly drug hangover on Thursday, but literally live to see another day.
I tried diligently to maintain my optimism. I channeled it into fundraising efforts for organizations that support cancer research, such as the Leukemia and Lymphoma Society. I developed connections with people who were going through a similar journey, and helped educate and comfort them where I could. I reaped the benefits of the Phillies tickets that third baseman Scott Rolen and catcher Mike Lieberthal donated to CHOP.
But it was hard. Tuesdays became my least favorite day of the week. If it was Tuesday, that meant the next day was Wednesday and I was in for a rough day. I worried about missing activities with my friends on Fridays, if I had not yet recovered from Wednesday’s treatment. Worst of all, I feared falling behind in school, since I could consistently attend class only on Mondays and Tuesdays. Pessimism surrounded me.
Speaking of pessimism, September is historically the worst month for the stock market. This year has been no different; as of this writing, the S&P 500 is down over 3% and the Russell 2000 is down over 6%. September Consumer Confidence numbers dropped from 108.7 to 103, a bigger decline than expected from August. As higher interest rates continue to impact businesses and investors, we are seeing major selloffs in fixed income holdings and many stocks. The selling momentum feeds on itself, driving the markets further downward. Is there any end in sight?
While it is challenging to be optimistic in environments like this, market pessimism serves a purpose. It gives patient equity investors an opportunity to capitalize on lower prices. It gives those in the fixed income space the ability to buy high quality credits with attractive coupons at a discount to previous prices. As Warren Buffet famously said, “Be fearful when others are greedy, and greedy only when others are fearful.” Well, pessimism certainly makes the masses fearful. However, it is simultaneously true that a thoughtful investor can benefit from periods of pessimism.
October 2, 2023 is the 23rd anniversary of my cancer diagnosis. It is a date I always celebrate with my family and loved ones. Not because it was the day I received the worst and most impactful news of my life, but because it is the day I started getting better. May optimism fuel us all as we traverse these challenging markets.
And Happy Red October – Go Phillies!
Grace Loveland October 2, 2023
Any opinions are those of Grace Loveland and not necessarily those of Raymond James. This material is being provided for informational purposes only and is not a complete description, nor is it a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance is not indicative of future results.
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