Imagine that someone approaches you with a wild and innovative idea. This idea will surely change life as you know it. Things you once thought were impossible are now probable. This idea will create a safer, more prosperous world. It will improve your standard of living and become indispensable to society. No, this is not the Crypto.com ad claiming that “fortune favors the brave”. And it is not a fad diet. The year is 1882 and this is the pitch for electricity from Thomas Edison’s electric company, Edison Electric Illuminating Company of New York.

Idea in brief:

• Financial markets are more predictable than most realize
• Bear markets become bull markets, and pessimism becomes optimism
• The greatest danger is being out of the market

At 7:55 AM on December 7th, 1941, 353 Japanese planes descended upon Pearl Harbor. Widely considered to be one of the more significant and pivotal moments of World War 2, it signaled the official entry of the United States into the hostilities.

The market was up nearly 3% the month of December 1941. The remaining years of the war (1942-1945) yielded the following annual returns, 12.4%, 19.5%, 13.8%, and 30.7%.

“The stock market is a device for transferring money from the impatient to the patient.”
Warren Buffett

People love to say that knowledge is power. However, the truth is that knowledge is only potential power. It is useless if you don’t act on it. Uncertainty makes many people fearful – and this prevents them from achieving their greatest potential by investing in financial markets and becoming long term owners of this economy; not just consumers. History tells us that corrections occur with surprising regularity but never last. The best investors prepare the dramatic ups and downs and turn it to their advantage. Once you understand these patterns, you can act without fear.

Earlier this week, SEI Private Trust Company published a Commentary entitled, “The S&P 500 Correction: The Medicine Nobody Wants to Take” which we thought would be of interest.