Market Volatility

Yesterday, I was about 90% finished sending out a commentary regarding the market declines of the past week (the markets were down over 3% at market open again yesterday, after a terrible Thursday and Friday), but the the markets turned around and surpassed Friday's close to go into the positives (so I changed the tone and my numbers in the commentary a bit), and then the markets declined again right before the close to end the day slightly negative (so I closed my commentary and decided to cut ties with it).

Similarly, yesterday we had lined up a portfolio rebalance - an extraordinary one - given the market declines of Thursday, Friday, and (at one point) Monday - which is a massive undertaking that we planned on executing today (we are hoping to have investment pools in place by the end of the summer which would make this process much faster and more efficient for all).

And then, this morning, the markets are (were?) up over 3.5%.... So... I promptly closed my reallocation spreadsheets, and re-opened my commentary to write something anew...

What a ride the markets have taken investors on (and their advisors).

It is quite a large responsibility to manage investment assets. Yes, the job is managing money, in theory... but in practice, our team manages your ability to retire, your new home, your kids' educations, your legacy... - a massive responsibility and duty of care.

One of the things I take pride in is having the demeanor to shoulder this massive responsibility - to keep things in perspective (in good time and bad) and to step back and assess context. I am not a market-timer, so I never know if it is a "good time to buy" or a "good time to sell". And with that in mind, we always refer to our framework for when we make systematic changes to portfolios, and we try to keep the noise (the news) in check.

If you have a long-term portfolio constructed properly, you should welcome market increases (you get to participate in them and your portfolio goes up), you should welcome market declines such as these (you hold non-market investments that can be reallocated into equity at lower entry points, essentially buying more of your quality investments as they go on sale), and you should welcome market stagnation as you get paid your distributions while you wait.

It's no easy task keeping a cool head when your wealth declines, but I will be doing my best.