The Flinchum File

Thoughtful Economic Analysis and Existential Opinions
Subscribe to the Flinchum File
View Archives

On Death and Investing

06/27/2022

One of the most important books I’ve ever read was the iconic “On Death and Dying” by Elisabeth Kubler-Ross in 1997.  She demonstrated that there are normal emotional stages after hearing a terminal diagnosis.  It is a useful exercise.

Naturally, Dr. Kubler-Ross’s perspective on predictable emotions related to death is useful for other life events.  Mark Hulbert of MarketWatch has written the very useful “Five Stages of Bear Market Grief” which are:

1.  Denial – Stock market weakness is a buying opportunity.
2.  Anger – Denial morphs into anger, investors rail against the unfairness of the pullback.  A hallmark of this stage:  investors see the pullback as a personal affront.
3.  Bargaining – Investors redirect their energies to determining whether they can maintain their lifestyle, despite the hit to their portfolio.
4.  Depression – Realization sets in that “cutting the fat” isn’t going to be enough;  major lifestyle changes will be required.
5.  Acceptance – Investors give up, viewing any sign of market strength as a sucker’s rally.

With the S&P 500 down almost 18% so far this year, it may feel like a terminal diagnosis, but it is far more likely to simply be the flu . . . a normal seasonal flu . . . and  certainly not bird-flu . . . nor Covid!

We are a fee-only advisor providing best interest fiduciary services to clients
in Chesapeake, Newport News, Norfolk, Suffolk, Virginia Beach, Williamsburg, and the surrounding areas of Hampton Roads.

CONTACT BAY CAPITAL ADVISORSWe Will Respond Promptly

Contact Us Bottom