Erin Hay, here at Monument, sent me a great read from Collaborative Fund. While it is mainly an explanation of market bubbles, it does a great job at framing the current environment into the right investor perspective.
I’m just going to paste them below, because I’m not sure I could write anything that would be better than this right now…
The majority of your lifetime investment returns will be determined by decisions that take place during a small minority of the time.
Most of those periods come when everything you thought you knew about investing is thrown out the window.
How you invested from 1990 to 1998 wasn’t all that important. The choices you made from 1999 to 2001 shaped the rest of your investing career.
What you did from September 2008 to March 2009 likely had more impact on your lifetime investment returns than what happened cumulatively from 2002 to 2007, or from 2009 to 2017.
The pilot’s famous answer when asked about his job — “Hours of boredom punctuated by brief moments of terror” — applies perfectly to investing. The brief moments of terror are the rise and fall of bubbles.
It is what we all do now that becomes absolutely critical.
Now is the time to do everything possible to use the cash that you have on hand to fund expenses and avoid liquidating any securities at current market levels. If you have your cash bucket, you should be using it now if you need it.
Now is the time to make sure your portfolio is positioned for a future recovery…it is NOT the time to create a portfolio that you wish you had when this all started.
I’ll conclude with another passage from the same read (reach out if you want us to send it to you). Again, it just summarizes my sentiments exactly.
Few things matter more in investing than understanding your own time horizon and not being persuaded by the price actions caused by people with different time horizons.
No matter what kind of investor you are, the key to success is not participating in a game other than the one you intended to play. And you can only do that if you make an effort to identify what games the people surrounding you are playing, separating them from your own. It is the only way I know of to have a reasonable shot at not getting sucked into bubbles in the first place.
If you need anything–a chat, advice or just an ear–please reach out to us. We are here. In this fast-paced environment, our blog and emails are the fastest way to get thoughts out so we are relying on this medium as our primary communication for general updates.
Keep looking forward,
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