The best advice I have ever received as an investment professional over the past twenty nine years is very simple: Never forget whose money it is. I think it has served me well to focus on our clients’ individual, unique circumstances. Recently I was asked: “If there was just one piece of investment advice you could tell investors, what would it be?” It really got me thinking. What could it be? Is it simple or is it complex? Is it trendy or is it timeless? I won’t give away my advice quite yet. That would be too easy!
We recently decided to write down what we think makes us unique and also reflects who we are as a firm. I am very proud of the outcome. Caitlin and I (okay, mostly Caitlin) spent a considerable amount of time trying to convey our belief system, also known in the marketing world as our unique positioning statement. Last quarter, we shared with you our core mission: A commitment to placing first the interest of our clients. I think it fits very well with the best advice I’ve ever received. Here is the rest of the story.
We believe in building strong relationships with our clients. This is the foundation of a truly meaningful investment experience. We understand your finances and investments have a purpose – your unique purpose.
Embracing the importance of personal integrity and stewardship of client trust, we commit to provide comprehensive and sound financial guidance, combined with an extraordinary client experience. We offer investment strategies to fit different needs and desires. From investment management to private client services, clients receive personalized guidance and exceptional service every step of the way.
I think our new unique positioning statement says it all. Nonetheless, it still doesn’t quite provide the investment advice for which many people are looking. This year has already established itself as one for the record books…and we are just getting started! January was not just horrible, the first two weeks of January was the worst start to the year for the S&P 500 in history![i] Oil prices have seen swings of over 50% so far. As the price of crude oil rebounded from last year’s sharp declines, the US stock market has also rebounded. Interestingly enough, it appears as if these two markets are currently joined at the hip! This is actually quite an anomaly to have the performance of these two markets so closely correlated. As the late, great Yogi Berra said, “Making predictions is hard, especially about the future.” Is anyone willing to predict how the current political environment is going to impact the markets?
Last quarter we commented on the fact that the Federal Reserve has finally started raising rates after nearly ten years. Please step forward if you thought over just a few short months, interest rates would generally decline! An attempt to predict and navigate the investment world with short term accuracy is a game we never intend to play.
So, how is it through all the years we have been able to help our clients navigate the ever-changing investment world? Is it easy? Certainly not! Do we think we can continue to confidently help clients in the future? Absolutely! So- what is the one piece of advice, in my opinion, that is fundamentally true for investors to have the best chance of success? What could it possibly be? Discipline. Yes, very simply stated, discipline would be my ultimate best single piece of advice I can give. It is not easy to do. It requires fortitude and commitment in good times and bad. The ability to navigate through life as it happens is never easy, especially when times are tough. The emotional roller coaster we endure as the media bombards us with the good, bad and ugly is enough to make anyone nauseous. I truly do believe the great investors are those who have a plan and the discipline to carry it out.
It just wouldn’t be a spring newsletter without the mention of Warren Buffet or the Chicago Cubs. It would be nice to believe Warren Buffet would agree with my advice. It may actually not be as far-fetched as my hopes of the Cubs ultimately winning a World Series. After last year’s success, the optimism for a title this year is running wild. I will just say as a (mostly disappointed) Cubs fan for more than forty years, at least I have discipline!
[i] Recent Market Volatility, Dimensional Fund Advisors, February 2016