Never a Straight Line
November 1, 2023
8
min. read
The financial world is a mess, both in the US and abroad. Its problems may be leaking into the general economy, and many fear the leaks will turn into a gusher. In the near term, unemployment may rise, business activity may falter, and headlines will continue to be scary. What should you do right now? Here are our thoughts…
Full transparency, the previous paragraph was written by Warren Buffet on October 18... 2008 (just over 15 years ago) at the height of the Financial Crisis.
His very next sentence was "So, I've been buying stocks."
The S&P closed that day at 945. As of this writing it's roughly 4,200.
A more than 600% cumulative gain over the last 15 years.
As financial advisors, we don’t have to wonder what the investment climate is like, it comes at us daily in the form of emails, phone calls, and questions during meetings.
When stock prices fall, the negative narrative gets even more attention. Feeding itself in a vicious cycle that tempts you to act.
Does it still make sense to continue to own what we own?
The only thing that’s up is this, everything else is down, do we even need to be diversified anymore?
Why not buy that? It's promising to protect against the next big crash.
Should we go to cash?
What about real estate or (gasp)… gold?
“Experts” say a recession is coming, should we get out and get back in later?
We’re all constantly inundated with relentless, fearful, and increasingly catastrophic headlines.
Given what we’ve been through over the last three years, these questions are completely understandable.
Our team is not immune to the emotions and fears that come with this type of volatility. We see the headlines and feel the emotions right alongside our clients. But our job is to prevent clients from acting on those fears.
And it is during these exact times that our value is the highest to our clients.
These difficult times are why the Gleason Group is here.
It’s why we exist.
And it's why we advocate so passionately for holistic financial life planning, meeting with us annually, and why we provide our thoughts and guidance to you every month.
So, what’s expected of us as your advisor during times like these?
Here’s a breakdown of what we can and cannot do as your financial advisor:
Take it from Warren Buffet,
“The only value of stock forecasters is to make fortune tellers look good.”
Unfortunately, many brokers and salespeople will prey on your worst fears. They will promise the moon and make outlandish predictions. They will look to take advantage by selling you products or complex strategies that feel great today, but will carry a lifetime of regret.
At the Gleason Group, we’re not going to do that.
As an independent registered investment advisor (RIA), we can literally invest in anything. We've spent the majority of our professional lives researching every type of investment and strategy. But we only recommend what we believe fits your life plan and is in your best interest.
We review your portfolio consistently.
We eat our own cooking and personally own what we recommend.
If we are not sending you information about a certain product it’s likely not because we don’t know about it, but rather we do not believe it’s a better investment alternative than what you already own.
Each holding in your portfolio is vetted by us and based specifically on your unique timeframe and purpose.
The recent market turmoil is a temporary bruise, not permanent damage.
You don't perform surgery on a bruise and you shouldn't abandon a professionally managed diversified portfolio because of a temporary decline.
Let it heal.
If left alone, your portfolio will adjust using the magic of compounding through these tough times and come out better and stronger than before. For context, take a look at the last 200 years.
Nothing beats the ownership of the worlds best companies over the long run.
"The stock market" may temporarily decline but we have no way of knowing which crisis will cause the market to fluctuate, nor how deeply or for how long.
As one crisis ends, it's replaced by another... and then another.
What you actually own, however, isn't a "market" at all, but rather a diverse collection of real companies. The most profitable, adaptive, well-managed companies on Earth. You own a collection of human ingenuity that is constantly adapting and improving with each crisis and adversity that comes its way.
Becoming a long term owner of these companies in pursuit of your financial life goals has nothing to do with "the stock market."
And fears regarding the long term prosperity of these companies makes absolutely zero sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5 and 10 years from now.
It ultimately comes down to understanding two essential truths:
The economy can never be consistently forecast.
The stock market can never be consistently timed.
Knowing these two truths is liberating.
You'll never have to look at current events or stress about when to get out of and back into the market as a result of them. It gets you nowhere. Since it can't be consistently done profitably there is no need to ever waste your time trying.
As a long-term, goal-focused, plan driven-investor you can simply turn your attention back to your financial plan and live your best life.
Our philosophy is not broken.
In fact, it's undefeated.
It works… but never in a straight line.
There is always a reason to sell.
Right now is an excellent opportunity to buy a collection of the best companies in the world on sale. At a minimum, just sit back and embrace the miracle of compounding by remaining fully invested while your diversified portfolio automatically buys additional shares of the world's best companies during this temporary decline.
Successful lifetime investing is hard.
Especially during times of duress.
If it were easy, everyone would do it.
Hang in there.
This too shall pass.
