View from the Chair: Windermere’s Market Perspectives (November 2020)

November 6, 2020

Like many of you, I’ve had to come up with new ways to workout during the pandemic. I’ve switched from in-person spin classes to at-home rides using the Peloton app. For those of you not familiar, these rides are part workout/part media production, as the instructors take you thru ride prompts while also interspersing wisdom and motivation. On a ride earlier this week, a quote grabbed my attention so much so that I paused the ride to replay it:


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“How do we build endurance? We endure” – Robin Arzon, Peloton VP/Instructor

This quote perfectly summarized how I’ve been making my way thru 2020 without even realizing it – one day at a time, facing challenges head on, adapting and adjusting, pivoting, practicing, enduring.

It also occurred to me that these words encapsulate my 20+ year investing journey and may very well apply to yours as well.

How do you stay the course? How do you resist the temptation to abandon your financial plan when things become volatile? How do you battle against “these uncertain times” when you know that times are always uncertain? How do you manage conflicting emotions? How do you drown out the daily noise and panic? Simply put – you ENDURE. And that consistent and repetitive action of not stopping, of doing it again and again, day after day, year after year, builds your ability to do it the next time, and the next time, and the next time after that. Enduring builds endurance.

Are you looking for ways to build your investment endurance? Here are five “training tips” to do just that.

1.) Start at the end – Investing is a daily act. Each day, you are choosing to react (or not react), take action (or not take action), and advance towards your goals (or move away from them). The best way to remind yourself which action will serve you is to start at the end. Where are you trying to get to? What are your goals – both a year from now and five decades from now? What major financial/life risks do you want to take off the table/avoid at all costs? What matters to you? What’s your life vision? What keeps you up at night? Knowing where you are going makes it considerably easier to know which direction to follow and when an action is warranted on a daily basis

2.) Normalize the situation – I’ve heard one phrase over and over again in 2020 – “these uncertain times.” I realize that there are many aspects of 2020 that are not common by any means and present a wide range of outcomes. However, I would challenge the fact that uncertainty is unique to this year. Life has always been (and will always be) uncertain. Perhaps we didn’t have to acknowledge it or be reminded of it so often in prior years, but we have never been in control of what comes next. Jon Meacham (famed historian and author) coined a concept called the Narcissism of the Present – the idea that our problems are so unique and so insufferable that there couldn’t possibly be a past period in history that had it worse (from which we could learn something about endurance and persistence to help us cope). As you run into challenges, take a minute to normalize them and realize in all likelihood, you’ve been here before and you can make it to the other side with a little grit and a little patience

3.) Build a team – There are very few areas of our lives that we navigate alone. We face emotional challenges with family and friends. We build our skillsets and education with coaches and teachers. We use professionals to assist with medical and personal care needs. Why should anything else be true for your financial journey? Building a team of professionals and/or trusted individuals to help you navigate your finances can give you a sounding board, a source of varying perspectives, an outside observer that can notify you of blind spots, an independent educator, and an active listener to help you navigate questions and decision points

4.) Do your homework and remain aware of the source – in today’s 24/7 news cycle, you are only seconds away from an opinion related to any financial topic you could think of. Researching and educating yourself when it comes to financial matters is key. Use your team outlined above or consider other sources, such as company financials and filings, earnings calls, books, news articles, analyst reports, and business media. However, always remain aware of the source and any potential conflicts (such as media’s need to get your attention to sell ads). Don’t be afraid to move against the consensus or to have your own opinions and beliefs. In the end, you are in control and are entitled to your opinions and actions, regardless of the prevailing news stories and viewpoints

5.) Focus forward – investing (and life) would be a lot easier at times if we lived it in reverse. But also, our only choice is to live it by moving forward. I often quote Wayne Gretzky’s famous quote of skating to where the puck is going, not to where it is – and I do so because that quote perfectly encapsulates a major tenant of investing. It’s so tempting to look backwards at what worked or to spend time thinking “If I’d only known then what I now know, I would have done x” or to think that what has worked in the past will naturally work in the future. Use history as a data point, learn from it, but don’t make these mistakes. Don’t look backwards for too long – after all, you aren’t going that way

I realize not one of the items listed above is easily accomplished. Every single one of them takes practice, patience, trial and error, humility, and courage. Bit by bit, step by step, day by day, you will build your skills and you will enhance your abilities. Enduring builds endurance.

Invest on,

Pam

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