I am going to do a little bragging, complaining, and confessing here. I have gained a little bit of mid-life wisdom through self-reflection. I have accepted many (but not all, I’m sure!) of my imperfections, inconsistencies, and weaknesses. I am able to laugh more and more at myself instead of getting upset with myself. One of my biggest faults lately is probably my obsession with my time. As many of you know, I’m currently juggling work and my MBA program, along with other community obligations. I am often at the office very early in the morning, and will come back in the evening and stay late into the night. I fit as much time in for my wife and son as I can, and hate giving up my weekend time with them. So I am a big grumbler and complainer when friends or family ask me to do “fun stuff” during those times. “I don’t have any time for that!” I say. Heaven forbid someone ask me to spend a little more time on fun things, only to be met with my initial and angry complaints.
The truth is, however, I’ve accepted my current situation. I have the ability to quit focusing so much on certain things, but have chosen not to… at least for now. There is a long-term pay off to all of this. Soon enough I will get to that benefit, and will finally have a little more free time for me, my friends, and that elusive idea of a “social life.”
This is where I’m getting with all of this. Libby, here in the office, is our family’s self-appointed custodian of planning for joy. She forces me to do those things or go to those events I need to retain my sanity. I just recently had my 42nd birthday, and she gave me (along with a bottle of zinfandel and box of Junior Mints!) the book, The Tao of Joy Everyday: 365 Days of Tao Living, by Derek Lin. I have always been a fan of Kung-Fu movies and Eastern Philosophy teachings and stories. The purpose of the book is to simply read one page a day. Each page includes a single Taoist saying, insight, or story that, when given a little thought to throughout the day, will lead to insight and joy. We all benefit from added insight and joy at any measure. I’m thankful to Libby for the thoughtful gift.
The very first lesson of the book is, “A journey of a thousand miles begins with a single step.” This comes from Lao Tzu’s Tao Te Ching, and many of you are probably familiar with it. In trying to take the book’s intent to heart, I thought about the saying and decided to do a quick mental exercise based on the literal idea of a 1,000 mile journey. So where is a 1,000 miles away? I started mentally meandering north, but then worried about the cold so I switched to a southern destination. Using Google Maps, I found out Key West is only 863 miles, so I had to turn west. Dallas is very close to 1,000 miles, and I remember Dad talking about how pretty the surrounding area is. My destination became Heath, Texas, on Lake Ray Hubbard. Now all it would take was that first step.
But, I then realized that the first step had already been taken. It was the Google Maps search. But, really, it wasn’t even that. The first step had actually been the identification of the idea of the journey, or rather the commitment to the journey. And once committed to, each step of the journey is equal in the realization of the goal. Google can give you a good estimate of steps: 1,000 miles is about 2,112,000 steps. The very first step towards Heath is no different than any other, they each cover the same distance towards reaching my goal. But the first step is different… because each step thereafter was dependent upon me taking that first one.
Although each step is equal, we can envision many hardships over the trip. Some days will be pretty, but others will include terrible storms, or bad places to sleep. Those times of hardship are all encompassing… we can only think about the misery of the “now.” But thirty years later when we explain to our grandchildren why we were dumb enough to walk from Rock Hill, SC to Heath, Texas, we will be focusing on the worth of the experience and the wisdom we gained and continue to benefit from today. Unless of course, we are looking for a little sympathy, or a reason to brag and explain to the youngster how much we had to put up with back in the day.
Last month on Monday, February 24th, the Dow Jones Industrial Average closed down 1,031.61 points. It was to be followed by another four trying days, with the DOW ending the week down 12.36%. That Monday night I started researching to find the last day that was that bad, and was surprised to find it was only about 2 years ago. On Monday, February 5th, 2018 the DOW at one point was down 4.6% over 1600 points, but I couldn’t recall why. Even if you go back to the news articles on that day, what people were afraid of and what spooked them into full out SELL mode is not concrete. In addition, the last big market swing like this one was just experienced less than a year and a half ago, when the market dropped almost 14% from September to December.
These are the stormy, torrential downpour days that end with a night in a roach motel on our hike to Heath, Texas. While they are upon us, the bad is all we can think about. But over the course of weeks, then months, and finally years they no longer take up mental space and we have to be urged to remember them at all. Even after 30 or 40 years of saving and investing in the capital markets, and explaining to your grandkids bouncing on your knees how bad those days were….”The Market was down over 1,500 points in one day!,” the point of the conversation will not be how bad it felt. It will be about what your commitment to invest your savings for the future meant to you in retirement, and what it means to your beneficiaries, be they your spouse, children, grandkids, great-grandkids or charity.
Each day of our pursuit of long-term preservation and growth of savings is equal in the realization of that long-term goal. Each step towards that goal may not be as comfortable or easy. However, since that first committed step… your first IRA contribution, 401k wage withholding, or savings account transfer… each day is equal in your resolve of reaching that long-term rate of return required to serve your future needs.
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.”
“Three causes especially have excited the discontent of mankind; and, by impelling us to seek remedies for the irremediable, have bewildered us in a maze of madness and error. These are death, toil, and the ignorance of the future.”
-- Charles MacKay, Extraordinary Popular Delusions & the Madness of Crowds
I went to the preeminent source on the study of mass hysteria for these quotes, and I think there are two reasons this book is so often used during times of duress like we are seeing in the marketplace now. First, people don’t talk like this anymore, so if you use such eloquent and intelligent sounding quotes, you can appear intelligent by association. Second, the book is so brutally and, apparently, honest about our failings. It gives us pause enough to consider our worries using common sense, and thereby gain strength. Here are our thoughts and plans regarding the current decline in the markets:
- We do not believe it is the end of the world. Humanity and Industry will continue long after Covid-19 is forgotten in the news (like SARS, ZIKA, and Influenza). We will continue to focus upon preserving your purchasing power into the future, with the use of strong and powerful businesses that are important to the survival and needs of all people before, during, and after times of turmoil.
- Your portfolios were already positioned defensively before the first case of the Virus was reported, having what we feel is a required balance to investment portfolio management, designed for just this type of event. We use FDIC insured Certificates of Deposit, paired with the U.S. Government backed U.S. Dollar, to balance the risk we take as business owners with the risk that your daily living circumstances will change.
- We will, however, aggressively use our cash reserves when the correct opportunity (cheap opportunity) presents itself during these downturns, and those opportunities will arise… especially at the individual company level. Invalidated fear, paired with peoples’ yearning for a short-term cure, is one of the greatest bargain makers in the equity markets.
- These panics have happened many times before. Most recently the S&P 500 lost 6% in May of 2019, 6% in July of 2019, and 14% from September to December of 2018. The current situation has been uncomfortable because of the speed, but it still comes primarily from that second quote above… discontent with our ignorance of the future.
- We are here every day and are willing to address your concerns at any time. If you are worried and have questions, please call, email us, or stop in.
- Especially… let us know promptly when your financial needs change. We will reposition your portfolio to meet new or rising expenses… but also put unneeded, freed up savings to work.
Finally, all that being said, for those of you who find the ebb and flow, or yin and yang, of the market gyrations overly taxing, we urge you to reach out to us more often! You have hired us to manage your long-term investment plan. This involves a continual management of the overall portfolio including our balance between savings at risk and savings not at risk. Anytime your financial considerations change, stop in or give us a call. You are never a burden to us. Even a quick phone call to inform us of your intention to buy a car in two months, or to pay for an upcoming wedding, or an unexpected dentist cost, will help us help you.
We at Anderson Griggs Investments thank you all for allowing us to help you reach 1,000 miles away. Since that initial committed step, we attend to your overall destination, but we are always here to offer respite on the worst of days, and make travel modifications when required.