🚀 The United States of relentless optimism

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This weekend, we celebrated America’s semiquincentennial birthday.

Many of us gorged on grilled meats and basked in the hot, humid sunshine to celebrate – as one does at this point in the year. 

This weekend, I ate my weight in hot dogs, but I also reflected on where we are 250 years into this crazy capitalist experiment.

Lately, I’ve been fielding a lot of questions about the weird spot America’s found itself in. Soaring government debt. Crushing unaffordability. The upper class takeover. The AI revolution.

It feels like we’re facing incontestable challenges.

Yet if you look at my personal accounts, you’ll see I’m heavily invested in America. Easily more than any other country.

Today, I want to tell you why.

If you know me well, you’d understand that I’m usually the party pooper in my social circles.

I like to have fun, but I’m also the one passing out the sunscreen, watching the Google maps route, and reminding people that it’s almost midnight so dear god let’s just order the Uber home already.

Some people are risk-takers, adrenaline junkies, perpetual optimists.

In most scenarios, I am not.

Risk appetite is a funny thing, though. You may not be up for skydiving, but you’ll forego paying for health insurance to save some money. You tried the ghost pepper hot sauce, but you can’t stomach an oyster. Your perception of risk often comes from a tangled web of your age, condition, experiences, and values. It’s not some dial that’s stuck on a particular number.

And Americans are a gutsy bunch. I mean, we all risk our fingers setting off explosives in celebration of our great nation every year.

But when it comes to the US stock market, we’re a little more hesitant to light the fuse. 

Ask a group of strangers on the street to draw you a chart of how the US stock market has performed over the past several decades, and I bet at least a handful of them would draw a straight line down. 

Americans who take part in the Conference Board’s monthly consumer survey – one of the most highly regarded studies on how Americans feel about the economy – are regularly pessimistic.

Since the survey started in 1987, there have been just 14 months in which over half of respondents thought stocks would rise over the following year. On average, 63% of people surveyed thought stocks would drop or stay at current levels.

Admittedly, Conference Board data shows we’ve been strikingly more upbeat about the stock market lately, but my point stands. Our risk appetite as American citizens drastically conflicts with our risk appetites for investing money. 

It’s just such a striking departure from how our forefathers intended this whole thing to be. A country for independent thinkers and capitalistic laws that reward the innovators.

And you know what? If you look at our stock market over decades, it’s not a story of doom and gloom.

Instead, it’s an empowering tale of collective human adaptability. 

Since 1950, the S&P 500 has gone through 34 drops of 10% or more, amid countless wars, humanitarian crises, financial crises, and a global pandemic.

Over that time, the S&P 500 has returned 8% per year on average, turning $1 into $446. Factor in inflation, and $1 invested back then is still worth about $32.

Oh, and contrary to what Americans have told the Conference Board for decades, the S&P 500 has risen about 80% of the time over 12-month periods going back to 1987.

You can theorize about the stock market’s success – or the rampant pessimism surrounding it – for hours. But I think the story of America is pretty simple.

Cycles of joy and pain have been the heartbeat of the U.S. stock market for decades. Humans innovate, businesses adapt, profits rise, shares increase. Then, a crisis hits. We react, we mourn, and then we rebuild.

America has been at the forefront of all of these cycles.

Why? Because ingenuity is in our DNA, and our free markets are the most efficient at turning ideas into progress. We break stuff, and then we build back better.

COVID was the most striking demonstration of this resiliency. The world was engulfed by a serious pandemic, and the U.S. economy effectively shut down for weeks. The S&P 500 dropped 34% in a month. We all thought the world was ending.

Yet innovation surged. Businesses adapted, technology evolved, and vaccines were developed at record speed. The stock market rebounded in response. Now, both the S&P 500 and company profits are double what they were before the pandemic began.

I’ve never set off a firework in my life. And I’d be lying if I said I wasn’t nervous about the future.

But if you’re one of those people questioning the future, I’d urge you to take a step back and observe the country around you. Warts and all.

Government debt is soaring, yet foreigners still can’t get enough of our markets.

The U.S. is still home to the most innovative and profitable companies on earth.

America’s soft power is undeniable. Travel anywhere, and you’ll likely be able to find someone with an iPhone in their hands, Jordans on their feet and Taylor Swift on repeat.

And hey, if we’re at the forefront of AI, then I expect even the robots will work in our favor one day.

I am a relentless optimist when it comes to investing in America’s prospects, even when the headlines are disheartening and the outlook seems bleak.

America isn’t perfect. She’s still the best we’ve got.

Thanks for reading!

Callie

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