Philpot’s BottomLine Tips: Keep Calm and Carry On

While attending my broker dealer’s national conference in November in Salt Lake City, I was privileged to have the opportunity to attend the weekly broadcast of the Mormon Tabernacle Choir at Temple Square.

The previous day I had walked around the city with rain falling on me and later in the day snow blew wildly, making it hard to see where I was walking. The snow was beautiful and exhilarating, but I can certainly say I was pleased to take refuge after a couple of hours in the warmth of my inviting hotel room. After experiencing the wind, rain, cold and snow it seemed more peaceful and relaxing to sit inside and watch the elements fall. This day however, the sun shone bright and was in total contrast to the day before. Much like the markets we are experiencing today, one day down with nothing but a bleak outlook and the next day up with the prospects of a much better economic environment appearing to be right around the corner.

While waiting for the broadcast of the Mormon Tabernacle Choir, I read the brochure I had been given with the day’s message for “The Spoken Word” portion of the broadcast. The title of the day’s message was “Keep Calm and Carry On.” It told an excerpt of the attack on the English people in 1940 by German bombers. Planes had filled the skies and Britain suffered many brutal attacks. The German Luftwaffe pummeled the land, but Hitler’s army never took control of the British Isles.

To calm the people, the British government printed posters to serve as a rallying cry. One of those posters said “KEEP CALM AND CARRY ON.” Fortunately, the invasion of England never occurred and the posters were not needed as extensively as was originally thought.

A few years ago one of these posters surfaced in a book store and has brought back the rallying cry “KEEP CALM AND CARRY ON.” The purpose of being in Salt Lake City was to attend educational sessions related to investments and the current economic environment, so I couldn’t help but think about the message I was reading in light of the current economy.

News stories bombard the average citizen with predictions of doom and gloom. Predictions of financial collapses of entire countries are almost daily news. In this fast paced world of extreme changes and what sometimes seem to be insurmountable challenges we need to hold onto these five words – “Keep Calm and Carry on.” Nothing good comes from chaos and panic. These words become a voice of authoritative reason. They depict a world of quiet, calm control, suggesting we downplay drama. These words call for us to set hysteria aside, keep steady, exercise restraint and rely on the strength within to keep us going.

It might help for us to look back into the past 50 years of history and look at some of the issues we have conquered as a nation and a world.

The 1960s were a time of fear — the Bay of Pigs, the Cuban Missile Crisis, the assassinations of John F. Kennedy, Martin Luther King and Bobby Kennedy, the devaluation of the pound against the U.S. dollar and the U.S. entry into the Vietnam war.

In the 1970s we experienced the exit of the United States from the gold standard, OPECs influence on oil, the resignation of President Richard Nixon and the Eurodollar crisis. The U.S. went into a period of stagflation which lasted between 1974 and 1978.

The 1980s brought us the Iraq/Iran war, the Mexican debt crisis, Black Monday and the Savings and Loan Crisis.

During the 1990s we experienced the tragic bombing of the World Trade Center. In 1998 the Asian financial crisis occurred and Russia defaulted on their bonds.

The first decade of the new millennium brought the collapse of Enron and World Com. Technology companies went bust, the stock market experienced a steep decline and the 9-11 attacks occurred. We declared war on Iraq and we have experienced a prolonged bear market.

Today we are in the midst of the U.S. downgrade on debt and are plunged into the woes of Europe as they attempt to sort their way through a financial crisis.

According to Standard and Poor’s, the return of the S&P index from 1950 through 2009 has been 11% annualized. Even though past performance is not an indicator of future returns, I think the lessons we can all derive from history is that when we are caught in the talons of negative global news and flat returns, we don’t panic, rather we should simply remember to “KEEP CALM AND CARRY ON.”

Just like the weather I experienced that weekend in Salt Lake City, one day the weather was rainy, cold and blowing snow — the next, well it was just beautiful!

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Carolyn Philpot can be reached at [email protected]

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