“Don’t Listen to the Voice of Your Low Moment.”
I can’t remember who gave me this wise advice, but I think it was my father. Dad has been an incredible investor his entire life, and it would be fitting that he gave me this guidance along with his thoughts about the wasted energy involving “worry.” I think this approach to life is also very applicable to investing and much of the volatility experienced by all in the past quarter. Additionally, the month of September was unpleasant by any measure. The performance of the S&P 500 for the month was (2.53%). More painful is that the S&P is negative 6.59 for the year through September with the Dow Jones and NASDAQ being equally painful. But, much of our stress can be averted by a simple strategy. The most important principle is to have enough “cash” on hand to ride thorough the storm. That is one of the most important points about investing assets in any stock market. The 3 requirements for successful investing in the capital markets are: time, accessible liquidity, and the proper risk tolerance. Without any of these 3 criteria, an individual investor is not adequately equipped for the common ups and downs of markets. Some people would add patience as a close fourth requirement, but I believe patience to be part of the time element requirement.
The most important thing that any of us can do at this time is take the following 3 action steps: first, set up an appointment with A.G. Campbell Advisory for a year end strategy session. We want to talk with you! This session is to review goals, liquidity, and the amount of money invested in the capital markets. We will also review upcoming needs, and risk tolerance. Second, expect to use down markets like this one to be opportunistic about repositioning for the purpose of not paying capital gains taxes and upgrading quality at lower market prices. Third, and finally, be open to new ideas about how to accomplish your goals and making sure that you don‘t own assets, real estate or anything that has outlived its usefulness to you or your family. When we do find these investments, there is often tremendous nostalgia involved which makes letting go emotionally difficult. Just remember: things are just things and why let the tail wag the dog? How crazy would it be to be a prisoner of things that are supposed to make your life better? Don’t do it, and a review with us will make sure that this doesn’t happen.
Finally, it is normal to feel awful when the markets are down by 7% in one quarter! It is also very normal to feel like your stocks will never recover, you are doomed, and the world is coming to an end. Again, this is unpleasant but normal. What history tells us is that, “so far,” this has NEVER been true. For those people who like to worry and say, “Well, this time it’s different because of a, b, and c.” I give them a big fat raspberry because the only difference is that it’s now and not 2008. By the way, had you held many of our investments since 2008, you would have regained your losses and made up more ground in many cases. The point is to take action about things that you can control and leave the rest to us.
Zandy Campbell, CEO