A rare Saturday post, but given the magnitude of the event, worth the time.
There are moments in history where we remember where we were or what we were doing at the time. Though I was very young, I recall the assassination of President Kennedy. Other events might include landing on the moon and the events of 9/11. For the latter I was actually in a hotel room in Clinton, IA with CNN on in the background waiting to do a pension seminar as an Ernst & Young contractor.
As a college football fanatic I also recall where I was when Ohio St. coach Woody Hayes punched a Clemson player in the throat after an interception (at a place called the Ground Round drinking and eating peanuts, for the record).
On September 15, 2008 Lehman Brothers declared bankruptcy; which to many folks including yours truly was the triggering event of the market collapse of 2008-2009. Josh Brown over at The Reformed Broker wrote a great post about this which triggered my writing this post. His post is recommended reading.
I was at Chicago’s McCormack Place at a financial advisor conference sponsored by TD Ameritrade. It was business as usual for a conference, but we all were certainly checking the markets and our voice mails via our phones. As usual during these types of market events none of my clients called in panic. The most surreal event of the day was heading to a group dinner at a very pricey downtown restaurant. The Loop looked normal and the restaurant was full, no signs of the recession that was eminent.
Why should September 15, 2008 be on your on your list of days to recall where you were and what you were doing? The recession and market drop that ensued are still on the minds of many investors four years later, even as the markets are at their highest levels since 2007. Many home owners have lost their homes due to foreclosure. Retirement savers saw the value of their 401(k) accounts tank, and many regrettably panicked and locked in those losses. Most sadly I see many younger investors whose investment strategies are being shaped by the fear they have witnessed during a period that makes up the bulk of their investing experience. I hope this fear subsides and these young people learn to take risks appropriate to their age and time until retirement.
As always please feel free to contact me with your investment and financial planning questions.
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