“We’ve never seen this before!”
Such is current observation of many. Whether it’s the latest decline in home prices or the volatility of the stock market, these mavens marvel at their situation’s unique status.
But things are never really new. Malcolm Muggeridge once famously observed that there’s no new news, only old news happening to new people. We’ve been here before. We just don’t remember.
Take housing. While the total US market hasn’t declined in a long time, many local markets have. In California prices declined a lot in real terms between 1990 and 1996. But their economy didn’t stop. In fact, the groundwork was laid for significant advances during the internet boom. Those who panicked during the sell-off missed a golden opportunity.
While things may be new to many, they’re unlikely to be truly unique. History doesn’t repeat itself perfectly, but it does rhyme. In the current crisis time and a little perspective will heal most wounds.
Douglas R. Tengdin, CFA
Chief Investment Officer
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