The Value of Discipline and Patience (2 min. read)
By Michael Franks, Iraq/Afghanistan Combat Infantry Veteran, Vantage Senior Wealth Advisor
War is hell, and in this increasingly virtually-connected life we live in, that hell could potentially cause folks to make emotional decisions about their investments, potentially crippling their long-term plans. Hourly we are bombarded by pictures, articles, Tweets, TikToks, and videos showing details about war that would have been seen by only a handful 20 years ago. This amount of information is an assault on our senses and can cloud the truth.
The truth is, historically, major events have had little to no long-term effects on the market and investor’s portfolios. That is the fact. It is cold, unfeeling, logical, and boring. But this fact is the pillow that disciplined, patient investors lay their heads on at night when they go to sleep.
Wayne Duggan writes:
…since 1941, the S&P 500 has averaged a total drawdown of 5% following 21 major geopolitical events, including the Pearl Harbor attack, the assassination of President John F. Kennedy and the September 11 terrorist attacks. (Duggan, February 24th, 2022)
Even more interesting, on average, it only took 45 days for the market to recover after these initial market disruptions.
Your investments are a testament to the plans, sacrifices, and hard work that you and your family have executed daily for many years. It is that discipline that has allowed your portfolios to grow for your goals, PERIOD. You and your daily financial habits are what make you successful; we have the honor of partnering with you to help you reach your goals. During turbulent times, discipline and patience are even more important for long-term investment success. Investing is a marathon not a sprint.
What can you do? Continue to be disciplined in your spending and savings. Control your debt. Have at least three to six months of emergency savings on hand. Maintain a properly allocated and diversified portfolio, one that is tailored to your specific goals and objectives. And when opportunities in the market arrive, be willing to take an appropriate amount of risk to exploit them.
In the words of Carlos Slim Helu, “Courage taught me no matter how bad a crisis gets… any sound investment will eventually pay off.”
Do not be a victim when investing, be a victor.
Duggan, Wayne. “How Do Conflicts and War Affect Stocks?” U.S. News and World Report, February 25, 2022 https://money.usnews.com/investing/articles/how-do-conflicts-and-war-affect-stocks