Independent Thinking
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Focus On What You Can Control

April 10, 2020

Focus On What You Can Control

We’re entering our second month of the COVID-19 pandemic and it continues to have a lasting impact on all parts of life. New daily routines have been established, as we all do our part to flatten the curve.

Instead of panicking, it’s better to step back and focus on what you can control – whether it’s social distancing, remembering to wash your hands, or your reaction when you see markets move.
Times of market volatility present an opportunity to refocus on your long-term goals and plan for the future. We will get through this and become stronger communities and investors.

With all of the market volatility the last few months, we thought it might be a great time to re-visit one of the ways we help clients. This isn’t anything new but as a reminder we have reposted our 3 guiding principles that most of our long-term clients should be aware of (we put these together over 15 years ago and they are on our website under the section Our Philosophy).

It is our strong belief that to be successful in reaching your goals it is necessary to have a plan in place and to follow a process. Our 3 guiding principles are easy to understand and are really more of a mindset required for success.

  • Faith in the future: We believe in tomorrow! Having faith in the future is the only outlook that squares with the past and our own life experiences.
  • Patience: Rome was not built in a day. It is important to realize that there are huge odds that you will have 20 – 30 years in retirement. That’s the good news. Now is your money going to outlive you or are you going to outlive your money? Most people’s investment time horizon is much longer than they think!
  • Discipline: Have a plan and stick with it. All success comes from sticking to a plan and not re-acting to events. Modifying inappropriate behaviour and exercising self-control is critical to long term success. A proper strategy without self-control is like having a fitness program without discipline – long on promise and short on results. We help you stay in control!

We do not claim to have any idea how far this outbreak will spread, nor how many lives it will claim before it is brought under control but neither does the media. We are reasonably certain that many of the world’s leading virologists and epidemiologists are working on it, and we believe that their efforts will ultimately succeed. Clearly, this is nothing more (or less) than our personal opinions.
But if the rich history of similar outbreaks in this century is any guide, this would seem to be a reasonable hypothesis.

Without examining previous health crisis’s in detail: the originator of SARS – a fish seller – checked into a hospital in Guangzhou on January 31, 2003, basically infecting the whole staff. The epidemic exploded from there.

On the first day of the list of epidemics cited above, the S&P 500, which is a measure of the value of the 500 biggest companies in the United States, closed at 855.70. Seventeen years and six epidemics later (including the current one), the Index is roughly three to three and one-half times higher and that is excluding dividends.

As always, we welcome your inquiries around this issue. In the meantime, I think the most helpful – and certainly most heartfelt – investment advice we can offer would be that you focus on your health and turn off the television set.

It is our strong belief that to be successful in reaching your goals it is necessary to have a plan in place and to follow a process. That is, to make your life and financial decisions not by accident but by design.

Remember, successful people ACT towards the future they want!

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