Balancing Consumption & Saving | Developing Long-Term Investing Patterns

Jonathan Satovsky
Jonathan Satovsky CFP®, ChFC®, CIMA®, CPWA®

Jonathan M Satovsky discusses how media headlines can perpetuate a self-fulfilling prophecy and how this has increased recent investor anxiety. He also offers guidance to help investors lean into a long-term investor mindset.

Good afternoon. This is Jonathan Satovsky of Satovsky Asset Management. October 2nd 2019 with a quick video blog update.

And as the October seasoned and the fourth quarter begins, we get a quick 800 point decline in the financial markets.

And the paper’s day-to-day, week-to-week, quarter-to-quarter over the last 12 months have accelerated commentary about recession being imminent as a byproduct of the clock of 10 years of a bull market in the United States of America.

Well, 50% plus of our economy is predicated on the conspicuous consumption of the consumer.

So I just want to attack that head-on.

Yes, as some people can parallel some government policies similar to the late 1930’s and point to all sorts of parallels to historical patterns and all of this nonsense.

But let’s just talk about the core reality.

If the vast majority of our economy is predicated based on conspicuous consumption or consumer consumption and every day people read about recession and 67% of CEOs all around the world are afraid of the future expecting an imminent downturn and people start to spend less or people look for signs to revalidate.

Houses are selling a little slower, prices have declined, stock market has declined ups.

So, if the outcome leads people because they read the commentary and they read the headlines that a recession is imminent, they should stop spending.

If it leads to people stop spending, then it’s a self-fulfilling prophecy.

People can create the future that they want.

Of course, if people see that wait a second, I still have a pay check that comes in.

I still see that people are waking up and going to work.

I still see economic activity.

I still see people hustling.

I still see people going to sporting events and buying clothes and traveling and airplanes are full.

So, consumption continues. And if consumption continues it seems to me rather difficult to envision a material recession or decline.

Yes, you could have slowing conditions and lower consumer demand but it depends on the loop to which we want to live in to.

And today, fear gage passed 20. Generally, when it passes 20 to 30, it’s a sign that people have a lot of anxiety about the future.

A lot of worry about long term investing as I’ve often routinely commented about.

Investing patterns have not been patient, have not been static.

People have not been thinking long term.

Most investors still have short-term thinking and have reduced and reduced their holding periods.

So people are living, maybe half of the population is living pay-check to pay-check.

It is living week-to-week. It is just trying to get through the week.

And if they’re getting through the week and they got paid, they’re gonna consume.

So I look forward to the day that basically we get past this daily short-term rhetoric and we can get an ecosystem built toward a good keen balance on consumption and saving with a little bit of delayed gratification and patience for future.

Today abundance and a future for tomorrow’s abundance.

With that, have a great October.

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Video Recorded October 3rd, 2019
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This video is not intended to be, nor should it be construed or used as, an offer to sell, or a solicitation or offer to buy any securities or interests in any strategy offered by SAM. Please remember that different types of investments involve varying degrees of risk, and that past performance is not indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the strategies recommended or undertaken by SAM) will be profitable. Market index information shown herein is included to show relative market performance for the periods indicated and not as standards of comparison. The market volatility, liquidity and other characteristics of SAM’s portfolio composition are materially different from the securities listed on public market indices. Market index information was compiled from sources that SAM believes to be reliable. No representation of guarantee is made hereby with respect of the accuracy or completeness or such data. Opinions are as of date of video and are subject to change. A copy of SAM’s current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request. SAM undertakes no duty to update information presented herein.

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