Piatchek puts stock market performance in perspective

Here's an update on what to expect based on stock market performance in the past during difficult periods. I also provide a recommendation on what you can do.

First, please do not pay attention to what you hear on the news these are only people's OPINIONS and you already know that $1.50 and an opinion will get you a cup of coffee.

Also keep in mind that reporters have a tendency to be critical and negative. Rarely do you see an upbeat news story. Please do not let their pessimistic view of the world worry you. They have always been wrong because we are all still here.

Here's how past calamities have treated investors:

1987 October the S&P 500 falls 23 percent in two days. The world is shocked. The Federal Reserve provides massive liquidity to the banking and brokerage industries to maintain solvency. But the newspaper is filled with talk about depression, doom and gloom.

Repeatedly, charts comparing the Great Depression to 1987 appeared in publications. Investors who panicked missed out on a great bull market. In fact, by July of 1989, the S&P 500 had recovered its loss from 1987 and went on to quadruple by the end of 2000.

1990/1991 recession/Kuwait invasion the United States was in the middle of a steep recession. News of layoffs abounded, as did announcements on plant closings (1.5 million jobs were lost). The business community had stopped investing. There was a crisis with the savings and loans and depositors worried if their money was safe.

The nation was gripped by a wait-and-see attitude. To top it off, Iraq invaded Kuwait and put their oil fields ablaze. The sky and mood were dark.

But the United States saved Kuwait, the mood to optimism ensued and the stock market went up and up for the rest of the decade.

Here's what history teaches us:

1. In the moment, like in the middle of the night, problems seem worse. But in the light of day, we can see how to get back on course. AND WE ALWAYS HAVE.

2. Moods more than economic reality cause bad economies. If people don't spend because of fear, then a recession is a self-fulfilling occurrence. Your job as an American who wants to support the United States is to be productive, keep living as usual, give blood, volunteer and put in a greater effort at the office.

Those are the activities that create a healthy economy. Each person can make their contribution. Recession is not something that comes upon us; it's a phenomenon that we create for ourselves through our own activities.

3. Life, economic progress and the stock market are always two steps forward, one step backward. Please use these realities from the past to insulate yourself from the doom and gloom attitude of the press and the people you talk with.

John T. Piatchek, CLU, ChFC

Springfield