Disciplined Investing
Howard Marks, the author of the very popular “Oaktree Memos” once wrote, “The rest of us know many possibilities exist today, and it’s not knowable which of them will occur. Further, things are subject to change, meaning there will be new possibilities tomorrow. This uncertainty as to which of the possibilities will occur is the source of risk in investing.”
Read this part again – “This uncertainty as to which of the possibilities will occur is the source of risk in investing.”
Uncertainty and possibilities. They’re part of investing.
“What’s the money for?” It’s a question routinely asked here at Monument. Most answers boil down to a future need. People want their money to grow into a future amount that will fund a want or need. They require a return that is above and beyond the rate of inflation so that tomorrow’s dollars are worth something more than today’s dollars.
I love stories. I especially love telling them. I’ve had a rich life full of adventures and characters…stories flow off my tongue. Stories are fulfilling and can still be convincing even when facts are exaggerated.
The problem is when stories get in the way of facts. If facts were exciting, we’d all read text books instead of novels for fun. It’s why individual investors are so captivated by pitches from financial product salesmen. (You know, those brokers at the big investment firms trying to sell investment managers that revenue share with the firm from the fee you pay.)
When was the last time you heard a boring story from a hedge fund manager? When was the last time you were at a barbecue and someone was standing around telling a story about a boring investment?
Disciplined investing is, in my mind, one of the single most important elements in any Private Wealth Design and investment strategy.
Discipline. That fact is boring. That fact does not make for a great story. That fact does not evoke a level of emotion that inspires people.
The only people that create stories out of discipline are people who have “made it.”
No one would watch a TV show like “The Biggest Loser” if there was no finale revealing of how “disciplined” turned into +100 pounds of weight lost over the course of a season. No one would read a book by a Special Operations dude that said, “Hey, I’m in the middle of really hard training and I’m disciplined enough to make it through,” with a final chapter titled, “Well, We Will See How it Turns Out…Wish Me Luck!”
The only stories told about disciplined investing are told by those who have made it. The funny thing is, the story is boring and most people don’t want to hear it. They’d rather hear the short story from the guy who doubled his money on an IPO or from that gal who is killing it in her portfolio because she has all her money in Facebook.
No one measures investment discipline in a quarterly performance review. The real measure of discipline does not come from comparison against a benchmark.
The real measurement of investment discipline comes from ARRIVAL. Arrival at a point in time when the money you invested over 20 years ago has grown into an amount after inflation that funds the life you planned for.
When you’ve made it, you’ve arrived.
The stuff you read about in the news every day is nothing but messy. It’s short-sighted, biased towards entertainment value, noisy and in the grand scheme of things not worth your attention as an investor who has a solid handle on the answer to “What’s the money for?”
If you feel like your current investment strategy lacks real discipline, reach out to us. If you feel like your advisor is light on substance but long on stories and pitches, call me.
Keep looking forward,
Dave
Important Disclosure Information
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Wealth Management), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. All indexes referenced are unmanaged and cannot be invested into directly. The economic forecasts set forth may not develop as predicted. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument Wealth Management. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Monument Wealth Management is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of Monument Wealth Management’s current written disclosure statement discussing our advisory services and fees is available for review upon request.
David B. Armstrong, CFA
President & Co-Founder
Dave got into the industry when he discovered his passion for finance in his mid-20’s. He’s a combat veteran and served as an officer in the United States Marines Corps on both active duty and in the reserves, retiring at the rank of Lieutenant Colonel. While serving on active duty, Dave was unable to spend money on deployments, so he became a self-taught investor. Along with a few bucks cash as a bouncer, his investing performance grew to be good....
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Capital Management, LLC [“Monument”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. No amount of prior experience or success should be construed that a certain level of results or satisfaction will be achieved if Monument is engaged, or continues to be engaged, to provide investment advisory services. Monument is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice.
A copy of Monument’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.monumentwealthmanagement.com/disclosures. Please Note: Monument does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Monument’s website or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your Monument account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your Monument accounts; and, (3) a description of each comparative benchmark/index is available upon request.
Please Remember: If you are a Monument client, please contact Monument, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.