A Perspective on Volatility

July 26, 2022

Having been a financial advisor for over 30 years, I can safely claim to have a long‐term perspective on market volatility, as do many of our clients. As well, I could share charts and statistics that show that after downturns of 10 to 30%, the 5‐year subsequent return of the broad stock market has been over 50%, etc., etc.

But people are asking, “is it different this time?” In John Templeton's timeless 16 rules for Investment Success (published in 1933) he states: “The investor who says, 'This time is different,' when in fact it's virtually a repeat of an earlier situation, has uttered among the four most costly words in the annals of investing.”

Our brains are hard‐wired for fear1. Survival for our ancestors heavily depended on seeing and responding to danger before it was too late. Modern day media is designed to capitalize on this fact, and we are constantly assaulted with danger signals and fear mongering.

None of us are immune to fear, certainly not I. However, I have learned to follow the oft‐given advice of focusing on what I can control, to not let fear guide my life nor my actions. I can honestly say that I have never made a wise choice that has been fear based.

I do not have control over the stock market, global threats, or political events. I do have control over the way in which I respond to these issues and deal with the fear around them. I can meditate, go to therapy, talk with a friend, or take a walk in the woods. I can turn my fear into action by getting involved with fellow activists, for example writing post cards with likeminded citizens to get out the vote keeps me hopeful.

You know what things bring you joy and comfort. I’m reminding myself, and you, that those things are especially important during times like these. We cannot rely on our primal brains to drive us in a positive direction, to remind us to do what is in our best interest. The onus is on us to be proactive and diligent.

Your vision and commitment to a world that works for everyone keeps me going. Thank you for that.

With courage,