Doing What's Always Worked
The uninformed investor could be forgiven for thinking that they need to keep up with the ever-changing (and sometimes crazy?) world we live in.
It’s tempting to think that we need to keep up with all the latest market events. Even now one may read of the recent surge in the gold price and consider whether we are under-allocated to it in our portfolio. We are told that we need to be aware of the US election's impact on the markets and worry about the economy’s short-term health.
To help you during this time, we include below a restatement of our approach to the stewardship of your invested wealth. We believe these are principles to live by, and as such they do not change based on short-term events.
We believe that all long-term successful investing is goal-focused and planning-driven. All failed investing is market-focused and event-driven. Every successful investor acts continuously on a long-term plan. Every failed investor reacts to the sudden and terrifying immediate market shocks.
We are long-term, goal-focused equity (stock market) investors, acting on our financial plan with patience and discipline. A financial plan which we help you craft. Our key role is in helping you not to react in stressful times like this (Did someone say second wave?).
We continue to believe that the equity market (a collection of the greatest businesses on earth) can’t be consistently forecast, much less timed, and that the only certain way of capturing the market's superior long-term returns is to sit through their occasionally steep but historically temporary declines.
If you’re acting on your long-term financial plan to accumulate enough capital to fund a dignified and independent retirement—which essentially just means that you’re adding money to your portfolio whenever you can—chances are overwhelmingly good that you’re doing the right thing.
Likewise, if you’re retired, and you’re continuously acting on a long-term plan of withdrawing far less than mainstream equities’ long-term historic compound return —again, the odds that you’re doing the right thing are very good.
Our focus is on history rather than headlines, and our mantra is from Churchill: “The farther back you can look, the farther forward you are likely to see.”
Think back to January 1 of this year. Have your most cherished lifetime financial goals changed since then? If not, we see no compelling reason to change your plan—and no reason at all to change your portfolio. Optimism remains to us the only long-term realism.