Jump In – But with a Strategy
Currently many investors are holding large cash positions because they are spooked by the volatility in growth stocks, and geo-political instability. Russia is amassing its military presence at the Ukrainian border, there is mounting tension in the South China Sea, and the politicization of vaccine distribution threatens global recovery.
And yet, the US stock market continues to test all-time highs, while interest rates and the US dollar stabilize.
Pure fear is not a good reason to stay sidelined. Waiting for calamity serves no one. First of all, disaster itself is a matter of perspective: It is not called a market “correction” for nothing. One investor’s hit is another’s opportunity. And the markets, like the people who invest in them, are resilient.
An example of how one person’s trash is another’s treasure came when I viewed a property in Switzerland during the height of the US mortgage crisis in 2008. The other prospective buyers saw over-grown bushes and a lot of work, where I saw an expansive garden and a place to socialize. A young couple saw a football field next door and imagined noise and lack of privacy, while I saw an entertaining view, and a guarantee that nothing would be built to block it. The realtor was anxious to close because his client had already bought a new home, and the real estate crash in the US was on everyone’s mind. I got the deal of my lifetime.
As an independent asset manager LaIF takes the “helicopter view” to find the opportunity in a broad spectrum of regions, markets, asset classes and products. Then we tailor strategies to focus on each client’s personal goals, empowering them to focus on what matters to them now. When investing for clients with young children, for instance, we see short-term, panic-driven stock price plunges as golden opportunities to pick up shares in companies that were over-looked during their initial spike. Their children will someday hold these jewels. The bond fund manager, who is required to buy and sell bonds constantly, frets over rising interest rates. But for our clients, who hold quality bonds purchased when rates were much higher and keep them until they mature at 100% it is good news: in a few years we can again build attractive bond portfolios for their retirement. Spikes in volatility? An opportunity to sell options.
Few will ever win at investing, if their goal is perfect timing. It is a sound, financial plan and strategy that provides investors with the peace of mind to concentrate on the important things in their lives – no matter the market environment – while also reaching future goals.