Hi there!
I’ve been getting the sense that my clients feel it is worse than it actually is out there. How about you?
That isn’t to say there aren’t challenges. Inflation is high. Interest rates will keep going up. Bonds are down year-to-date. Growth stocks have been walloped.
But overall, it could be a lot worse, right?
On average, the S&P 500 has an average peak-to-trough decline of 14% every year. Through April 30th, we still have not hit that point (though we are pretty close).
There are more facts and figures, and they are included in the client letter.
Yet, I am reminded that during periods of declining markets our clients do not care about charts and facts. They are in an emotional space. Meet them there during your upcoming conversations and meetings (I did this poorly the other day so I will try to eat my own cooking, as well!).
One phrase I’ve come to resent is, “Uncertainty is really high right now.”
When is uncertainty not high? When have we ever had certainty regarding the future? There can be no certainty about the future. It’s the future.
In my experience, one of the core virtues of a successful equity investor is simply acknowledging that you get paid for investing despite uncertainty.
We don’t invest when uncertainty is low. We don’t sell when uncertainty is high.
We just continue to invest knowing that uncertainty is ever-present. Because it is. The brave ones, like you and your clients, persist.
Your cause is righteous. Keep up the amazing work.
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