Illogical Inaction and a Mythical Creature
August already. Flying by, isn’t it?!
I’m writing this on a rainy July day, so hopefully by the time you’re reading this the sun is splitting the skies and we’re basking in a balmy 22 degrees (I thought asking for sunshine was stretching it, anything above 22 degrees would turn it into fantasy worthy of the Tolkien name).
That said, no matter how hot it is, it appears that you’re taking your life in your hands if you fancy a swim in the waters of Costa del Portobello.
Speaking of sunshine, a little heads-up in that I will be taking my first proper holiday since the business started over the second weekend of August. So the communication responses might be a little delayed, but rest assured I’ll get back to you. Usual rules apply in that, for anything urgent, please call the mobile and I will answer.
Seemingly Illogical Inaction
I travelled to Denny to meet some new clients in July. The meeting was excellent and I’m confident their family will be significantly better off with their financial future mapped out for them. We’re also going to be saving them some money compared to their existing arrangements, so it’s happy days all round.
During the meeting, the discussion turned at one point to the subject of investment, and how strong the markets have been recently. It was a good opportunity to chat through a scenario that I always like to with any prospective client:
“Markets have risen a lot recently, that is true, but let me tell you about a time, at some yet unknown point in the future, where you are going to wonder if I have a clue what I’m doing. I may well be the most frustrating person you speak to that week.”
The clients looked a little confused, which is perfectly natural. I continued:
“There is going to be a point during our working relationship when your investment values show a significant fall compared to where we started, or perhaps where we were either six months or a year ago. Understandably, you might want to call me and ask what I’m doing about this - what action should we take during this period of market turmoil!?”
Sidenote - Because, ladies and gentlemen, that is the one thing that is pretty much guaranteed in investment. There will be a period of, potentially extreme, volatility, with sharp and frequent falls. This will be unnerving, and the media will be having kittens. That old classic “Billions wiped off the stock market OH-MY-GOD-PANIC” will get a run out again. It is completely normal to feel a little uneasy during this time - who wouldn’t?
“And when you call me and ask me what we should do in response to all this apparent chaos, my response is going to seem borderline flippant.”
“Nothing. We should do absolutely nothing about this, Mr and Mrs Client.
“Instead, we sit tight. We keep hold of the assets that we have bought, we review our cash position, and we await the inevitable rise in asset values again. Because that too, history being our guide, will also happen. We simply don’t know when, in the same way we don’t know the timing of the inevitable fall in advance.”
The most dangerous words in the English language, in my humble opinion anyway, are “if only”.
Closely followed behind them however, and more applicable in this story, are “This time it’s different.”
PS: The above should not be taken as a hint not to call me during times of market turmoil. ABSOLUTELY DO CALL ME. That is exactly what I am here for, to keep clients of this firm “in their seat” during such times.
For such volatility is the price of the above-average returns that investing in the stock market provides.
“Don’t ask, don’t get”
Or words to that effect.
It was my usual riposte when my mum said “no” to me asking for something chocolatey.
In that vein, if you are a client of or have had some interaction with Purpose FP and you felt comfortable doing so, I would be very grateful if you were able to leave us a brief Google review. It really helps the firm’s online presence. We’re on 9 reviews and I’d love to get to double-digits.
You can do the magic here.
Thank you!
And that’s us!
It’s a short one today, although very “wordy” as per the above. Sorry about that. I’ll try and have some nicer pictures throughout the next one.
To make you feel better, here is a picture of a mythical and powerful being rarely spotted in Scotland, but often seen throughout the lands of southern Europe:
There.
You feel better already, don’t you?
The Optimism Prism
Your monthly dose of the good stuff:
Recommendations
I’ve been drinking more non-alcoholic beer these days. Why, you ask? 2 children and a dog. That’s it in a nutshell - I can no longer handle hangovers. This stuff is fantastic.
You May Never See Us Again: A detailed story about the Barclay brothers, and a kind recommendation from a contact (thanks G). I’m about halfway through and it’s very well done.
Born poor, these enigmatic twins built one of the biggest fortunes in Britain together from scratch and spent six decades at the epicentre of British business, media and politics. Their empire, said to be worth £7bn at its height, included Littlewoods, the Ritz Hotel, The Daily Telegraph and the channel island of Brecqhou.
My grateful thanks for your time and attention.
Thoughts, comments, and feedback are always gratefully received.
Andy
