ONE OF MY FATHER’S favorite sayings was, “This too shall pass.” Recent events have made me dwell on its meaning—and wonder where the phrase came from.
It seems to have originated as a Persian adage. It was employed in a speech by Abraham Lincoln before he became the 16th president: “It is said an Eastern monarch once charged his wise men to invent him a sentence, to be ever in view, and which should be true and appropriate in all times and situations. They presented him the words: ‘And this, too, shall pass away.’ How much it expresses! How chastening in the hour of pride! How consoling in the depths of affliction!”
I always considered the saying to be a tonic to help us get through difficult times. It never occurred to me that I should ponder those words when times were good. But Lincoln correctly identified the two key messages captured by this short phrase. In 2020, we’ve experienced both our “hour of pride”—new all-time highs in the stock market—and the “depths of affliction,” including the coronavirus, a collapsing economy and a stock market crash.
Hour of pride. We’ve seen astonishing U.S. stock market returns over the past decade. History’s longest-running bull market made us all feel like investing geniuses. Despite reasonable concerns about high valuations and a constant—if hardly deafening—barrage of naysaying from the permanent bears, many of us continued to ride the bull to dizzying heights.
True, we may have done some annual rebalancing. Perhaps we were chastened by the late 2018 correction. But when a recovery rapidly followed in 2019, we wished we had bought more at the bottom. Each new market high made us feel superior to the annoying bears, who just knew the next crash was right around the corner.
Count me among those caught in this emotional maelstrom. A few years ago, when I retired from fulltime work, I used a 401(k) rollover as an opportunity to reduce my stock exposure. On many occasions during the next few years, I wished I’d put all or some of that money into stocks. I bought a little, but I kept most of the rollover in conservative investments. As recently as the end of last year, when I created our family balance sheet, I rued not putting it all into stocks.
Depths of affliction. Over the past six weeks, we’ve experienced cascading fears about the pandemic, accompanied by wild swings in the stock market. We’re rightly scared for our health, our families, our communities, our livelihoods and our financial future. There’s very little we can do to combat this threat, save the mundane tasks of washing hands, sanitizing and self-quarantining. The full impact on our daily lives and the economy are still to be determined.
What to do? I think we need to heed the wisdom of Lincoln. Knowing that our society has survived the depths of affliction—wars, terrorism, recessions and other pandemics—should give us some solace. There are many people who have dedicated their lives to helping us get through times like this. With pride, I count my wife among them. She’s been a nurse for 40 years and has spent her life in the care of others. Be grateful for those, like her, who are working so hard to keep us safe and to sustain the life we know.
As horrifying as things seem today, I believe we will come through this. It may take longer and hurt more than we expect, but we will survive. The stock market will come back and we will see new highs. We will have our hour of pride once again.
When that happens, let us recall Lincoln’s words and remember that good times will also pass—and be sure to keep that perspective, so we not only build investment portfolios that will weather all seasons, but also truly appreciate the many wonderful moments in our lives.
Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. Rick enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. His previous articles include Think Like a Retiree, Not Too Late and Cheat Sheets. Follow Rick on Twitter @RConnor609.