For investors, proper perspective is about the most important quality one can possess. I am referring to the practice of viewing where we are in terms of historical benchmarks and the statistical probabilities from long history

Our shared human condition is that we are creatures of the here and now. We focus on What have you done for me lately, Mr. Market? And by lately, we are tempted to consider the past few weeks or months, certainly not years. Industry professionals think in terms of trends and percentages up and down, but you the investor think in terms of dollars and cents. The dollars were hard to earn in the first place. They are extremely painful to lose, if even for a short period.

So where is the stock market now? Using the S&P 500 Index, the stocks of the 500 largest US companies, for reference, last week the index lost 2.10 percent in value. That doesn’t sound like much. But if you have $500,000 invested the Friday before, it is $10,500. This is more than most of us ever earn in a month.

Would it help to know that less than 30 months ago last Friday, the half million would have been worth about $377,643. The growth since January 1, 2017 has been 32.4 percent including dividends. This is a fairly narrow example, but you could choose to focus on still having gained approximately $112,000 during that time rather than losing $10,500 last week. But also, if you are spending from the account, the gains are being used and no one I know puts all his money into the S&P 500 during retirement. It’s not a perfect world.

Of course, none of us can continuously remember what happened last week, much less last year or before. Because of these factors, we have every right to forget how much we have gained and spent and to focus on the latest threat to our financial well-being.

What are the worries du jour? On Friday President Trump re-instituted $200M in import tariffs on Chinese products and they promptly replied in kind. This same spat probably caused the awfully bad fourth quarter of 2018. (This was accompanied by the suspicion that the almost perfect conditions existing then would probably become less than perfect in the future.)

The fear that a trade war could cause another Great Depression is no small matter. Everyone now professes to be a free trader which translated, means, No Tariffs, Nowhere, No How! Our favorite economist, Brian Wesbury, reminded us on Monday of the analogy President Reagan used. My paraphrase: Since we (countries) are in the same boat, if one partner shoots a hole in the boat, it makes no sense for us to shoot another hole in the boat (by raising tariffs).

Wesbury’s analogy: “But China hasn’t just shot a hole in the boat, they’ve become pirates. If Tony Soprano and his cronies robbed your house, would free market principles require you to trade with them to buy those items back? Of course not!”

He asserts that China needs us and Western nation consumers more than we need Chinese products. With a little time, we can get the same things from Singapore, Vietnam, Mexico, or even from ourselves, perhaps even cheaper. Our exports to China are less than 1 percent of our GDP, but China’s exports to us are 4.6 percent of its GDP.

I am not predicting the May stock market slide will be finished right away, but I would suggest that you will not likely be able to remember much about it a year or two from now. It will take a loss of another 15 plus percent from Monday’s low to revisit the December 2018 low. Please don’t jump out of the boat!