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Investment Insights, LLC

The Sun Also Rises

In 1926 Earnest Hemmingway published what most people consider his best novel, the Sun Also Rises.  Like most Hemmingway novels, it’s about real people and events from his life, but fictionalized, and, like most Hemmingway novels, it spends a lot of time being dark and depressed. 

2022 has been rather like a depressing Hemmingway novel.  At the beginning of the year, we saw inflation rising but it looked likely to subside soon.  Then Russia invaded Ukraine and the price of some very important commodities shot dramatically higher all at once.  Inflation eventually reached double digits in June, and the Federal Reserve moved aggressively to tame it. 

So many dark signs arose.  The yield curve inverted.  Stocks declined to bear market territory and for the first time in memory, bonds entered a bear market at the same time. 

And on and on the grind continued as we moved forward. 

It’s easy to forget what Hemmingway pointed out, that the Sun Also Rises. 

Irony screams when one remembers that the man himself seems to have forgotten the title of his best novel.  Hemmingway took his own life in 1961.  Hemmingway fans may say I am unfair because he suffered from injuries in a plane crash that left him in pain most of the time.  After 7 years of pain, he most likely gave up on the idea that the sun would rise again. 

But here the analogy of Hemmingway and his novels and wonderful book title breaks down because we investors of 2022 may be as depressed as a Hemmingway novel but for us there is the very real likelihood that the sun will rise again, and the depression and pain of 2022 will be behind us.

Some years back I did a look back into the history of the stock market, specifically the S&P 500.  I did a simple thing.  I looked at the price on January 1st of each year and the price on December 31st.  If it was higher at the end of the year than at the beginning, that was an up year.  And of course, the opposite was a down year.  I looked back at the entire 20th century and what I found was that most decades the stock market was up in 7 of 10 years.  Sometimes it was up in 8 of 10 years but most of the time it was up in 7 of 10 years.

Now it’s entirely possible that life as we know it has completely changed.  That the great American experiment with free enterprise and free markets is now finally over and that life will not get better in future decades, that the American economy will no longer grow.  I cannot rule out this possibility, but ask yourself, do you really believe it’s all over?  I don’t.

And if you are like me, then we believe quite strongly that the Sun Also Rises.  The sun will once again shine on the markets. 

Do I sound overly optimistic?  Really, it’s just math.  History suggests that each year has a 70% chance of the S&P 500 moving higher.  So, if I am bullish, I have a 70% chance of being right. 

If you are a regular reader of this column, you may recall my description of a television show I saw 30 years ago.  It was Wall Street Week in Review with Louis Rukeyser.  Back in 1992 one of his guests was the famous mutual fund and international investing pioneer, Sir John Templeton.  At one point Rukeyser noted Templeton’s optimism and asked him why, amongst all the horrible worries of the time, he was capable of optimism.  Templeton replied, “There are always things to worry about.  But life today is better than it was 30 years ago, and it will be better 30 years from now than it is today.” 

Sir John was 88 years old then.  He didn’t live another 30 years to see that his vision turned out to be true.  But his message is clear.  Keep your eye on the big picture.  Don’t get scared out by today’s list of things to worry about.  There’s aways a list. 

Things get on the list because they are things to worry about.  They are real.  They are not made up.  The list changes every year but it never goes away. 

Don’t get scared by the list.  Remember Sir John Templeton and remember Hemmingway’s excelling book title, The Sun Also Rises.

Hal Masover is a Chartered Retirement Planning Counselor and a registered representative. His firm, Investment Insights, LLC is at 508 N 2nd Street, Suite 203, Fairfield, IA 52556. Securities offered through, Cambridge Investment Research, Inc, a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Investment Insights, LLC & Cambridge are not affiliated. Comments and questions can be sent to These are the opinions of Hal Masover and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal. Past performance is no guarantee of future results.

Indices mentioned are unmanaged and cannot be invested in directly.



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