Déjà Vu

June 28, 2020
min. read

Volatility is nothing new.

Staying invested, you endure the rapid declines, but fully participate in the rebound as well. In addition, staying invested allowed for the reinvestment of interest and dividends providing compound growth in the future.

Feeling a wild range of emotions during these times is normal but acting on them can be financially catastrophic.

The decisions we make during these times will shape our financial future for decades to come. It’s almost impossible to see, but we are making progress and we will persevere.

However, it’s not just the surviving these "crisis" that make us stronger, it’s what we learn about ourselves in the process.

The extent of our growth depends entirely on our attitude and the narrative we construct around it. It can make us sick with anxiety or it can identify things we’ve taken for granted in our lives.

If can bring us down or can clarify what matters. It’s all up to us.

To borrow a line from the great Yogi Berra, “It’s Deja Vu all over again”, as we face yet another "crisis."

We never ever make near term market predictions and will never endorse or support market timing in any form. These predictions and gut feelings simply don’t work and are not effective over the long-term.

We build long-term portfolios based on your life, not the market.

These short term, temporary market moves, while difficult to endure, are completely irrelevant to your long-life goals, full stop.

If you need money in the next twelve months, it should either be in cash or in one of our conservative Bucket 1 holdings. Outside of that, we have investment strategies designed to last and persevere through anything the world can throw at us.

There is a real sense of freedom once you accept that it’s impossible to predict short-term market moves and embrace that trying to do so is a waste of time and energy.

Investment management is one of life’s true paradoxes in that studies clearly show the more time we spend monitoring, reacting, or tweaking, the worse we do and the more of our precious life we waste.

Uncertainty is our only certainty.

Right now there is lot of fear and uncertainty, but have faith, this too shall pass. Below are some of our key takeaways we have learned from times like these. We welcome your thoughts and feedback.

Simple is better.
Small is beautiful. Less is more. You get the point. For many, an immediate and real understanding of what truly matters is brought to the surface during scary times. Avoid complexity and focus on what is most important. Hint... it’s not "the news."

Timing the Market is impossible.
In good times and bad, there is no way to predict or anticipate how the market will react. As always, stock picking, market timing and politically based decisions never result in success. No one predicted the top or called the bottom.

Trying to time the market is gambling, not investing.

Inaction is the best action.
This is not being lazy, it’s being disciplined. And, with a well planned diversified portfolio, it's the most important action you can take with your money during times of emotional extremes.

Choices matter.
In addition to investor behavior which we discussed above, what you do with your time during these experiences make all the difference. Focusing on what you can control and things that bring about positive, healthy experiences in your life are paramount to living a fulfilled life without worry, especially during difficult times.

Mindfulness and self-awareness are crucial.

Communication is key.
Speaking often to those around you, both personally and professionally will help to feel more connected.

Emergency funds and access to capital are critical.
The last thing to do during a market downturn is sell long term investments. Having access to cash, emergency reserves and line of credit reduces stress and provides liquidity during uncertain times.

Leverage is dangerous.
Everything has a cost, especially leverage. Debt vehicles and payment strategies matter, especially during volatile times.

The media is not your friend.
The goal, in many cases, is not to inform, but to entice you consume more. Studies clearly show an inherent focus on the negative, while attracting eyeballs and viewership, leads to increased anxiety, fear, and stress.

Make a conscious effort to consume long-form, well researched news and books vs. short-form, opinion pieces, clickbait and cable “news.”

Professional advice is paramount.
Having a quality team matters. Financial advisors, doctors, lawyers, CPAs, insurance agents and other professionals are critical to help us navigate difficult times.

Utilize your professionals, that’s what we are here for.

This time is not different.
While these are difficult times, our country (and the world) has faced far worse and persevered.

This time will be no different.