Live Big Digest® – 11/11/11 Edition

Live Big Digest® – 11/11/11 Edition

We thought we’d celebrate this numerologically-significant Veteran’s Day with another edition of the Live Big Digest. While this is the day in which we all pause, reflect, and give thanks for the service and sacrifice of those in our armed forces, it also happens to be a day that many think significant for its numerological value.

Many consider 11/11/11 to be a particularly propitious date and couples will be tying the knot in record numbers today.  Some, on the other hand, have apparently concluded that the Mayan Long Count calendar suggests that this is a day of doom.  As in so many things, it’s all a matter of perception and whether one chooses to focus on the positive or the negative.

Which puts us in mind of the heightened anxiety that continues to hang in the air and color our perception of all things financial and economic.

We thought we’d offer a little exercise based on the behavior of the Dow Jones Industrial Average in recent months and years.  The Dow, of course, is a less than perfect model for what’s happening in a diversified portfolio, which will tend to outperform the index in the long run, but it will serve nicely to illustrate our point.

We’ve illustrated the point-to-point performance of the Dow over the last two months and the last two years below, followed in each case by a day-by-day line.  As you can see, the day-by-day movements provide no clue as to where we’re going to end up, they’re merely “noise” (or the dog versus the dog walker if you recall our LBD from the end of August). Noise, however, can be very anxiety-inducing.  A good alternative to watching the markets might be to spend a few minutes with a mind-body meditation like one devised by our good friend Jane Cunningham.

Here’s what the last two months look like if you just observe the starting and ending point:

Point-to-point performance of the Dow over two months

Now we’ll add in the daily price moves (aka, the “noise”):

Daily chart of Dow for 2 months

Pretty clear why people have been so anxious.  Now let’s do the same thing for the past two years:

And, again, we’ll add the daily moves:

Are you going to watch the dog or the dogwalker?

In any case, the next time you start to feel unsettled by the latest financial headlines, remember the old Wall Street saying: The market climbs a wall of worry.

Have a great weekend!  The Yeske Buie Team