A few weeks ago, I was at my mom’s house with several of my siblings going through boxes of endless memories she had accumulated over her lifetime. She decided it was time to give to each of us the many personal treasures she had carefully stored in our own personal boxes. Report cards, medical records, school assignments, awards and elementary school artwork were all there. I couldn’t believe she had saved so many handwritten stories from my childhood, with comments from my teachers about how they were sure I would one day grow up to be a writer.
Perhaps the greatest treasure were her dozens of personal journals, beginning when she learned to write, that carefully documented her life and the lives of her children. To be able to pick a day in history and read what was happening on that day, the joys and challenges we were facing, and how we got through them, was both inspiring and educational. As a history major myself, I value the gift and the blessing of being able to learn from the past.
A large portion of my personal history is recorded in the more than 700 financial columns I have written over the many years of my career. When considering how to respond to today’s economic challenges, I often review my past writings, looking for similar situations to gain insight from. As an example, recently an individual was asking about the effects of rising interest rates on the real estate and stock markets. He was concerned, with many other investors, that mortgages surpassing 5% might create a difficult economic situation. I turned to my past columns for some perspective and found one written coincidentally exactly 14 years ago in June of 2008.
As most will remember, that was a very difficult year for investors. To offer some hope at a time of continual bad news I wrote a column then about the “Good News” I found in the world that I felt many were overlooking. One item I mentioned was that “record low interest rates” would likely have a positive effect on the real estate and stock markets. What jumped out at me in the article was that the “low” home mortgages at the time had just fallen below 7%. Today’s mortgages that many investors fear are too high, have only just passed 5%. One of the great lessons of history is that the news, “good or bad” is often what you make of it, and perspective is everything.
Significant insights can be gained by reviewing the events of the past, and our decisions surrounding them. History is a great teacher and keeping your own investing history may come in handy when facing economic situations similar to ones you have been through in the past. My own investing journal has helped me a great deal and I recommend other serious investors consider doing the same.
Dan Wyson, CFP® is author of “The Gold Egg," and “21 Financial Myths” and owner of Wyson Financial/Wealth Management 375 E. Riverside Dr. St. George, UT 84790 - 435-986-9525 – Securities and Advisory services offered through Commonwealth Financial Network, member FINRA/SIPC, a registered investment advisor