By: Tim Hoyle, CFA, Chief Investment Officer

Everyone has read a Top Ten list, right? One of TVs most iconic segments started on September 18, 1985, when David Letterman introduced his first Top Ten list.  The spot itself was a parody to all the lists running in magazines, and a pillar of late-night comedy was born. [1]

Please don’t mistake our intention here. There is nothing humorous about bear markets.  Navigating negative returns and news is an exhausting chore. One of Haverford’s goals is always to provide clarity and calm, serving as the anchor in a storm with at least a pinch of optimism wherever possible. We believe investing is a marathon, not a sprint, and an optimistic attitude can set apart successful long-term investors. It is well documented that optimists experience increased physical, mental and emotional health benefits. They manage stress better and demonstrate resilience and strength during illness and life stressors.

In the spirit of helping each of you manage the stress and remain resilient during this market downturn, here is our Top Ten Reasons Investors should be Optimistic Now:

10. History shows markets bottom in anticipation of recessions, not after recessions.

9. The Federal Open Market Committee is steadfast in its war to quash inflation.

8. Bear markets increase forward return potential.

7. Sentiment (often a contrary indicator) hasn’t been this sour since 2009.

6. The S&P 500 is trading at 15x expected earnings. The equal weight S&P 500 is trading at 13x, while the small-cap R2000 is at 11x.

5. Markets like split governments, a likely outcome of the November mid-terms.

4. Markets have a history of being higher one year following mid-term elections.

3. Every bear market in history has been followed by a bull market.

2. Investors during previous bear markets have witnessed positive returns a year later 85% of the time.

1. Markets don’t bottom on good news. War, zero covid, peak inflation, and the most constrictive monetary policy in 40 years…every day brings us closer to conclusion.

We end every video HaverCast with the statement, “Stay optimistic and stay in touch.” A statement made more relevant during turbulent markets. So please, stay optimistic, stay in touch, and let’s go Phillies.

[1] (34) Dave’s First Top Ten List: Top Ten Words That Almost Rhyme With “Peas” Letterman – YouTube

This was David Letterman’s first-ever Top Ten List. He’ll give his last tonight. – Vox