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Navigating the Noise

| January 10, 2019
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Enduring this past quarter has been a challenge for us all. There are no cavalier statements to minimize the dramatic movements in the stock markets around the world. Comparing markets to the Great Depression and Great Recession surely does not help. So, how do we navigate all the negative noise? I recall a speech by legendary University of Iowa coach Hayden Fry at the unveiling of his statue in 2016. It put so many things into perspective as he reflected on football, his health and life in general. He said, “One of the best medical treatments I’ve got is my attitude. The brain attitude of keeping a sense of humor, enjoying life, and enjoying all of the people that are winners. Be grateful. Be thankful. Don’t pay attention to the presidential elections. Really, I’m sincere. Don’t watch television. It takes away from you enjoying life.”1

Perhaps the notion of not paying attention to the Presidential election can be replaced with the noise regarding stock markets, geo-political headlines, trade wars, border walls and interest rates hikes. Coach Fry is correct. We would all enjoy life more!

Reflecting on the newsletters of the past year, our topics were eerily relevant as the year progressed. We began the year challenging everyone to understand their own personal investment philosophy. Are you a long-term investor or a short-term trader? Do you believe in diversification or not? Then we emphasized that volatility is back. How true! We reflected on the 10-year anniversary of the end of the Great Recession. We remarked on how long and positive the market recovery has been. Finally, last quarter we put the dreaded curse on the market. We asked everyone what you would do if we ever had another 20% correction. Now that many of the global stock markets have hit a bear market correction of 20%, we need to ask the relevant question again. What will you do now?

  • Sell everything
  • Sell some
  • Do nothing
  • Reallocate my investments
  • Buy more

In looking back at prognosticators for 2018, I can’t recall anyone who got 2018 correct. In my opinion, one of the biggest traps for investors is trying to predict the markets over short periods of time. Be sure of one thing, we won’t be making any grand predictions for 2019! In a commentary by Jim Parker from Dimensional Fund Advisors he wrote, “The path to success in many areas of life is paved with continual hard work, intense activity, and day-to-day focus on results. However, for many investors who adopt this approach to managing their wealth that can be turned upside down.” His analogy of Taoism, which translates as “do without doing” means that in some areas of life, such as investing, greater activity does not necessary translate into better results. He goes on to say, “In Taoism, students are taught to let go of things they cannot control…when you plant a tree, you choose a sunny spot with good soil and water. Apart from regular pruning, you let the tree grow.”2

Navigating the noise may be a simple as letting it go. Don’t let it get in the way of managing your wealth, or more importantly, enjoying your life. It is our job to prudently manage a solid long-term portfolio that works for your individual circumstances. We understand the important role we have and will be here for you though all the noise. My wish is for everyone to have the success you want, the wisdom you need and the happiness you deserve!

Kevin

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  1. Wesley, Adam. (2016). ‘Hayden Fry unveils statue of his likeness at Iowa’s FRYfest.’ The Cedar Rapids Gazette. September 2, 2016.
  2. Parker, Jim. (2018). The Tao of Wealth Management. Dimensional. July 2018. Page 1.

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The material in this publication is based on data sources we consider to be reliable, but it is not guaranteed as to accuracy and does not purport to be complete. The interpretation and organization of these ideas are the views of Kevin Welu and do not represent the opinions of TrueNorth Wealth Management. This information is not intended to be used as the primary basis of investment decisions nor because of particular individual client requirements, should it be construed as advice designed to meet the investment needs of one investor.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Private Advisor Group, a registered investment advisor. Private Advisor Group and TrueNorth Wealth Management are separate entities from LPL Financial.

The economic forecasts set forth in the presentation may not develop as predicted. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. No strategy assures success or protects against loss.

The Dow Jones Industrial Average Index is comprised of U.S.-listed stocks of companies that produce other (non-transportation and non-utility) goods and services.

The Dow Jones Global ex-U.S. includes equity securities with readily available prices that trade globally, excluding the U.S. The index is a subset of the Dow Jones Global Total Stock Market Index.

Lipper indexes are based on the 30 largest funds by asset size within the Lipper objective and do not include multiple share classes of similar funds.

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