Good morning & happy Monday!
“The way I see it, if you want the rainbow you gotta put up with the rain.”
– Dolly Parton, country music singer
A number of years ago I had the privilege of exploring many of Utah’s National Parks with my dad.
We had a packed agenda trying to cram as much as we could into our weeklong getaway. Despite being short on time, we decided to drive the extra couple of hours to Bryce Canyon National Park even though we knew we would only have a short amount of time there (maybe an hour, two at tops).
As we were approaching, we were watching the sky get darker and darker and it became abundantly clear that the weather was not going to cooperate with our plans (this was before smartphones where you could check the weather anytime, anywhere).
Well, sure enough, just about the time we arrived it had started raining … not just raining, absolutely pouring! It was late afternoon by this point, and we were tired from our busy days, and my dad and I both contemplated just turning around and heading out … after all, there was only about an hour of daylight left anyway and it looked like the rain was going to absorb all the remaining daylight.
Well, we decided to just stick it out and sit in the car to see how things developed. Fortunately, after about half an hour the rain started to subside, and you could see a bit of sunlight off in the distance. That’s when it hit us… What happens oftentimes after a rainstorm? Maybe we get to see a rainbow.
And sure enough, we were treated to a double rainbow over Bryce Canyon National Park … and we had the place entirely to ourselves! The pictures were incredible, and the experience was even more so.
There was a very strong thought to bail, virtually everyone else at the park did, but the realization that rainstorms don’t last forever gave us hope to stick it out. As a result, we were treated to an experience that is still memorable today, 20+ years later.
Now, if you’ve been reading my Monday Morning Memos for a while, you probably know where I am headed here 😉
Rainstorms don’t last forever in investing either.
When you are in the middle of a rainstorm, it feels like it will never end. As the saying goes, “Time flies when you’re having fun” … Well, that also means it seems to drag on when you aren’t having fun. And in a down market you are most certainly not having fun.
So, what should we as investors do through tough markets?
I think it really comes down to 3 things: discipline, patience, and a plan.
Discipline is hard. We tend to like the result of discipline, but the discipline itself is not enjoyable. As an example, if I went to the gym at 5am 5 days a week (clearly, I don’t 😉) that would require a great deal of discipline. I would benefit with better health, more energy and probably a longer lifespan, but the discipline required is the price to pay for those benefits. Same in investing. If you only invest when it’s easy, then you will never invest. Discipline isn’t just a nice thing to have when investing, it’s required.
Patience … there’s a trait we all love … NOT. Patience is also hard, I don’t know a single person who enjoys being patient. But it’s critical for investment success. Do you know of any business owner who opened a business and had instant success? It virtually never happens. Any meaningful endeavor in life usually requires a fairly high amount of patience (marriage, raising children, education, starting a business, etc.). Investing does too. As unfun as it is, be patient.
And then comes the plan 😊 Since I’m throwing out other well-worn phrases… “People don’t plan to fail; they fail to plan.” If we are investing without a plan, we are just saving what we think we should save and hoping for the best. If we are retired, we would be taking out an amount we hope will be sustainable for the duration of our lives, but it’s kind of a guess without a plan. You wouldn’t take a road trip across the country without a map (or GPS), don’t invest without a financial road map: a plan.
I don’t know when the next financial rainstorm will hit, nobody does, but when it comes I hope these words are helpful in putting some perspective into the events. The media will try to convince you that the world is coming to an end, and I can tell you in advance my advice will be: be disciplined, be patient, and stick to the plan.
It is truly an honor to partner with you, rain or shine. If there any anything we can do to support you along your journey please don’t hesitate to let us know.
Make it a great week ahead.