Faith Over Fear
It’s the week after we celebrate our risen Savior…but that’s not the theme here today.
It’s fairly obvious that we’re going through a bit of turbulence in the financial markets. There’s a lot of noise coming out of Washington and around the world. And it’s that kind of noise that creates fear. Who really knows how things will look a year from now? For most investors, the financial markets affect their future, retirement, their current business, jobs, and family.
In light of that, here’s what I’m not going to do: I’m not going to tell you to just sit tight and have faith (that’s also not the theme for today). I’m not going to tell you that we’ve seen the last of this recent roller coaster - or even that it won’t get worse. Truth be told, I would bet the opposite. Yet again, who knows? None of us has a crystal ball.
Here’s what I will tell you, though: Opportunities are found more times than not during a crisis. Although we can’t rely on the financial markets to always do what they have done in the past, we know that buying low or buying fear, as Warren Buffet calls it, has proved a pretty successful strategy.
Consider these three things…
If you’re sitting here 5 years from today, 10 years, 20, 30; what’s your outlook on this world—and our country? Do you think we will have reverted back to the old days where we are growing and killing our own food and bartering for the things we need? Do you have a slightly more optimistic outlook, but don’t think things will change or grow all that much from the world we live in now? Or do you think the world will keep advancing and more and more people will be living like Americans with their own version of the American dream? Do you think that, as a nation, we will have more technology, efficiencies, comforts, and even things we know nothing about today?
Sometimes we forget that the financial markets are made up of companies that literally make up our lives. This includes our toothpaste, cereal, clothing, tools, transportation, equipment…not to mention the tiniest parts, supplies, and ingredients to manufacture these every day goods. We think of the allure of Wall Street and immediately think about Space X and Artificial Intelligence – forgetting that they’re only a small fraction of what the financial markets really represent. This is not to say they aren’t important. After all, AI is changing our world even as I write this. However, I just don’t see us eating AI, brushing our teeth with AI, wearing AI, or baking our favorite pie with an ingredient generated by AI. AI may change how all of these things are made, but it still will never be everything we need to survive and thrive. Frankly, our financial markets are made up of businesses that live under the rules of supply and demand just like your local business down the street – but they can change the way we think. If there is an opportunity to buy into a growing business at a discount, would you do it or at least strongly consider it? What if you could expand your business to meet the demands of the consumer at low cost with lower risk – does that sound appealing to you? We sometimes forget that a stock is simply ownership in a company. If you think it is a good company and an investment into it meets your needs, would you want to buy it at the highest price or lowest price that you could? There are a multitude of opportunities arising in the midst of these volatile markets today.
A lot of market driven fear is derived from the lack of…perhaps not knowing whether or not your investments really meet your needs today and, in the future…perhaps not knowing what you do (and will) need, which couples with the current volatility concerning you by bringing even countless more related questions to mind…you don’t know when you will need your money or you are inching up on retirement and think you need to be more conservative…perhaps you don’t have enough cash…perhaps you don’t have a plan at all. The “lack of” any of these items is a good reason to fear volatility. The irony is that this is the one thing which you can control. If you aren’t looking at the current markets as an opportunity to address the “lack of”, then get moving! By the time fear fizzles out, it will probably be too late.
To be an investor – arguably, a prudent investor - it isn’t all about the analytics. Analytics are extremely important, but they aren’t everything. You can have the best analyst and portfolio manager in the world, but they won’t matter if your fear gets in the way.
You have to have faith! What does the future hold? What makes business sense? And perhaps most importantly…what is your plan and how does it interconnect with the opportunities at hand? Carpe diem my friend!