by Ron Bare
In February of this year, I spent a week in Florida with my family as well as with some of our team from the office. Visiting colleges with our daughter, going to Disney’s Animal Kingdom, enjoying the beach, and attending the annual “Kingdom Advisor Conference” all seem like a distant memory. It is hard to believe that this was only three months ago! While we had heard a few “rumblings” of a new virus during our travels, we saw no masks or any cause for concern, even when boarding our plane on February 23rd.
The equity markets at the time were reaching new highs. The US economy was very strong, with record low unemployment and solid GDP growth rates. Although some were saying markets were beginning to look overvalued, the bottom line was that companies were profitable and were predicting even greater profits throughout 2020.
Then Covid-19 arrived and with it, full-blown panic. The market dropped 34% in 33 days, a record decline. I discussed this in our video blog in late March (which you can find on our website.) Now, two months later, the dust has begun to settle and although the panic has subsided there is still uncertainty about where we go from here. The markets have since recovered much of their decline, however, a large amount of skepticism remains. With this in mind I thought it may be wise to pass on a few thoughts relating to investing success over time:
- When stock prices are going down, the enduring value of the underlying companies is going up. The lower prices go, the more value is to be had at those prices. You understand this in almost every other area of your economic life (we all love to purchase something on sale!) It is essential to apply this same principle to the stocks of American companies we invest in – or you may never become a successful investor.
- Staying fully invested during market declines is the only sure way to capture the entirety of the markets long term advance. It is not possible to consistently sell out of falling markets and buy back later at the “right” time. Most of the market driven news is geared toward market traders, NOT long-term goal and plan driven investors. To the latter, market fluctuations are just part of the process to be rewarded for the long term returns of some of the greatest companies of America and around the world.
- You should never try to make long-term investment strategies out of short to intermediate-term disruptions. We always advise to make investment decisions based on our values and financial plan, not short-term events or emotions. The past few months are a good example. Let’s assume you ignored the market downward collapse of 33 days in late February and March and woke up today, May 15th, and took a look at the markets. Yes, they are down 15-16% from earlier highs, but that is in the range of a typical market correction that happens about once every 12-18 months.
There is the ongoing chance that the markets will continue to drop back due to the uncertainty we still are facing with the Covid-19 virus and economic wake it will leave. If you adhere to the ideas presented above, then these fluctuations should not impact your long-term goal and plan driven investment strategy. Perhaps when we focus on the long term, we not only will make much better investment decisions in the short term, but we also will rest better as we wait for time to pass.
by Ron Bare
For many of us, both individually and as companies, the year 2020 was to be an exciting “Year of Vision!” As 2019 drew to a close we began thinking of developing tools and correspondence to help our team and clients pursue a greater vision – not only in the area of finances, but also in other areas that money can be used as a tool to enhance. Areas of life such as family relationships, health, friendships, spiritual enrichment and more can all be improved when we gain better vision in our desires for these areas.
Then, as you are very aware, Covid-19 arrived in our country and the urgent took priority over many other initiatives. “2020 Vision” suddenly took a backseat. Perhaps at first your response was, what is the point of planning or focusing on our future vision when we need to survive this health scare and the financial/job implications that may flow from it. That is how I felt as this unfolded these past few months. But now I have another thought – what if this “reset” or “pause of life” (which is unlike anything we have ever experienced) is a gift to actually help us get a better perspective for tomorrow? Would we have ever really stopped all the activities and busyness of our lives long enough to gain true “2020” vision for our future? I’m doubtful.
Have you heard the old saying “Eat Your Carrots – they give you good vision!” Well, as I child I loved carrots. I always chalked my love for carrots as the reason for my 20/20 eyesight. Even as many of my peers have started to lose their vision and need corrective eyewear to get back to 20/20, I proudly kept eating my carrots. But time is moving on and I find myself holding the paper and my phone a bit further away from my eyes as I read. I stubbornly have stayed away from the eye doctor but I must admit, to get back to “20/20” I may need more than carrots for my vision!
Perhaps this quarantine has been the “corrective eyewear” we needed to get back to 20/20 vision for our lives. Let us not waste the good that has come from this. What have we learned? What do we need to change when life gets back to “normal”? Do we really want to go back to the way things were? Like many of you I am ready to fully get back to work. I am ready to get outside and go out to eat, “sit down style!” I miss sporting events, both locally and professionally. I miss actually going to church each Sunday. But I am not ready to go back to the hustle of plans most evenings and weekends, running to school/sports events often, and catching a few brief conversations with my kids and wife in passing. I LOVE the family dinners, games after dinner, conversations in the kitchen, cooking meals together, actually finishing projects that have been on the list, working out each day with my son and knowing that the upcoming weekend has a good bit of margin for life and rest! I love having extra time to connect with many of our clients on the phone and not running from appointment to appointment feeling rushed in many conversations. I want to listen to them, hear how they really are doing, and pray and help anyone I have the opportunity to spend some time with.
What is my vision for 2020 and beyond? How about taking better care of the body that God has given me and making exercise part of my daily life – doing it with my family. Growing spiritually as I read the Bible and connect with God on a deeper level because I’m spending time with God and actually listening to what He is saying in His word rather than feeling rushed by the next daily agenda item. Connecting with family by being together and enjoying each other (most of the time, 🙂 ) rather than just going to watch them participate in an activity. Really connecting with a few close friends and sharing life together. And working with additional margin so we can not only provide financial counsel but care and connect in deeper ways.
How about you? What is your vision for beyond the Covid-19 quarantine? What have you learned? What have you enjoyed and what do you need to DECIDE now so when life gets back to “normal” you do not, but rather you create a “new normal”. A normal with purpose, vision, margin, enjoyment and time to connect with God and people – the way God designed it.