Good afternoon.

Wow, what a first half that was in the markets!

You’ve heard ad nauseam about how bad it was, but has anyone suggested you try thinking about it this way?

• Bonds became 10% cheaper in the past six months.
• Emerging-market stocks got 18% cheaper.
• International stocks got 19% cheaper.
• Large U.S. stocks became 20% cheaper. So did publicly traded real estate.
• The Russell 2000 index of smaller stocks got 23% cheaper.
• Big growth stocks got 28% cheaper.

As I wrote last month:

     I like to say that the problem with stocks is that they contain the letter T. If they were called socks instead, people would treat a 20% decline in price not as a selloff but as a sale.
When socks get 20% cheaper, you don’t rush to get rid of the ones you already own; you check your sock drawer to see if you need a few more pairs. Young investors should treat stocks the same way.

Years ago I proposed what I called the Benjamin Graham Financial Network. BGFN would be a counterpoint to the seething red graphics, the relentless focus on fluctuations and the shrieking commentary so typical of financial television:

In this market decline, what has given you the most comfort? How have you taken control of your emotions?

Here are a few of my favorite replies.

1. Sticking with the plan of weekly contributions….
2. Simply looking at stocks as “on discount.”
3. Having a long-term view on everything — relationships, money, career, etc. — helps you remain calm and understand a simple bump in the road doesn’t affect the long journey. Everything worthwhile takes time/patience.
—Ethan Korte (age 22), Bowling Green, Ohio

Playing golf on weekdays! Then all I see is green.
—Kenneth Yap, Kuala Lumpur, Malaysia

We have an investment advisor whom we trust who checks in with us during times of turmoil with sound words of wisdom and fact that help us understand what’s going on….This is how I sleep well at night. It also helps that I check the futures in the morning and then don’t look at the market during the day.
—Kathie Ramey, Longview, Texas

I erased my stocks apps so I didn’t check them every day. I now maybe check them once each quarter, and try not to follow the news. Started to spend more time doing sports that get my mind away from the stocks.
—Jorge Castillo Talgi, Guatemala

I draw a timeline back to when the S&P 500 was at the same level as today. Usually that line is shorter, often considerably shorter, than what I had thought.
—David Reynolds, Lexington, Va.

I ask myself if I would actually feel better if I sold a stock and attempted to re-buy it at a lower price, then I realize how futile that logic is and enjoy the red numbers while they last.
—Zeyad T. Al-Mudhaf, Kuwait

I started investing on my own starting October 2018, when everything I bought kept going down. I survived it. Then I survived March 2020. So I know I will survive this too. Therefore I am not struggling with my emotions now.
—Camille Alumbaugh, Lewiston, Idaho

Not needing the money in the short term and not having to sell anything, if ever I needed some, are reassuring. Not being forced to do anything is about the only edge we individual investors have over the pros. I don’t intend to waste that.
—J.A. Plamondon, Montreal

In the third of our series on the origins and history of financial terms, let’s look at where the word fee comes from. (The first in the series, on the gastrointestinal origins of the word inflation, is here; the second, on the derivation of cash, is here.)

Fee stems from a Frankish, or early Germanic, term that “sounded somewhat like fehu-od,” says linguist Anatoly Liberman of the University of Minnesota. Fehu, derived from the early Proto-Indo-European root peku or “cattle,” signified wealth.

I find it endlessly fascinating that so many of our financial terms derive from ancient words for livestock.

One of those roots, fehu, survives in the modern German vieh, or “cattle.”

Pecuniary, “relating to money,” also originates in peku, that archaic word for cattle.

Even our term capital, from the Latin for “head,” originates in the idea of representing wealth by how many head of cattle you had in your herd.

After it first came into Old English more than 1,000 years ago, fehu “got mixed with fief,” which appears to be derived from the same root, says Prof. Liberman. For a time, the two words were used “like interchangeable synonyms,” he says.

Then, around the late 14th century, fee spun off from fief, acquiring its modern meaning of a payment for services. Early on, it carried the connotation of tribute money or an offering to someone superior in class.

From there, it was a natural leap to signify a payment to a professional.

Take a moment to think why cattle came to symbolize wealth in the ancient world:
* they are mobile
* they fatten and multiply when well-tended
* they regularly produce milk (much as stocks produce dividends!)
* they can eventually be turned into meat (the way stocks produce realized gains when you sell them).

I think investors would be a lot more sensitive to costs if they understood the meaning of livestock embedded so deeply in the word fee.

You should think of a management fee not as a piddling percentage or fraction of a percentage point. Visualize it instead as a portion of your cattle being confiscated. A fee can be worth paying, but only if it’s a fair exchange for valuable services — not if it’s like forking over tribute money to a fiefdom or getting hit by cattle thieves.

Rosa Bonheur, “The Highland Raid” (1860), National Museum of Women in the Arts

An Elementary Correction

Sir Arthur Conan Doyle’s Sherlock Holmes story, “The Adventure of Silver Blaze,” was published in 1892. In the last issue of this newsletter, I made a typo, incorrectly stating that the story was first published in both 1892 and 1894. Money Mailbag   Mary Cassatt, “The Letter” (ca. 1890), Art Institute of Chicago Have a question you’d like me to answer? Want to weigh in on what you just read? Got a tip on something that I or my colleagues should investigate? Itching to tell me I’m wrong about something? Just reply to this email and I’ll see your note. Don’t forget to include your name and city. Be well and invest well, Jason