The Markets are Fascinating Beasts
The markets are fascinating beasts, in fact in some ways too fascinating and, in extreme cases, even addictive. They play the emotional strings of greed and ‘fear of missing out’ (FOMO), releasing strong hormones into our bodies. No wonder then that talking about the markets and the contemporary world often takes up the bulk of our time when managing our finances. However, for us, as an academically grounded wealth manager focusing on the things that can be proven to add value for clients, we have to ask, is that rational?
I would argue that it is not. Investment management is clearly a fundamental part of what we do, but a good portfolio founded in a well-researched investment philosophy will most likely not change much from year to year. Furthermore, the most elusive aspect of successful investing is arguably sticking to the plan through thick and thin over the long term, despite the occasional headwinds facing the markets in general or a particular strategy. The last 12 months have certainly been a potent reminder of that on several levels. I have frequently quoted the serenity prayer in client conversations as volatility and uncertainty were raging around us and value and smaller companies were underperforming, leading many to ask what we should do?
God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.
My point is: We cannot control the markets and spending too much time thinking about them may lead us astray into trying to predict the future, more often than not with a negative impact in my experience. On the other hand, we can control a lot of things: our budgets, our appropriate risk allocation, when we retire, what we spend it on, how we think about wealth transfer to the next generation or charities, whether any risks can be mitigated with insurance, whether investments can be held more tax efficiently, etc. For me, the greatest irony of all is the agony and stress that our wealth has the power to bestow on us when surely the purpose is exactly the opposite! I see my mission as properly understanding my clients’ financial goals, ambitions and passions and then helping them leverage their finances to reach these through a plan they have faith in over the long term.
In conclusion, even though we are passionate about our approach to investing and the markets, we would describe ourselves as a planning-led firm with a focus on the things we can control.
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The partners are Mr J E Matthews and Mr J R D Sellon; Mr D R B Dorman, Mr H Q A Findlater, Mr T Flonaes, Mr N B Tissot, Ms A L Solana.