When we announced at the end of last year that we were modernizing our quarterly reporting, we didn’t realize that three months later, we’d be living through another example of why we want to de-emphasize short-term performance. In this letter, I want to share insights on why we’re focusing on long-term success over short-term fluctuations and offer reassurance during volatile times.
The markets have been gyrating over the past few weeks, and the volume of noise in the investment media is louder than usual. It’s yet another period of heightened fear and uncertainty almost guaranteed to trigger unnecessary panic among undisciplined investors. Whenever we pass through one of these phases, I think about a story I heard from a colleague way back at the start of my career as an advisor, which I wish I could share with every investor.
My co-worker had just returned from his first whitewater rafting trip and was telling me about the experience. He showed up on day one, never having been in a raft before, and was surprised to learn they would be running a Class V rapid—the most difficult and dangerous level on the whitewater rating scale. Naturally, he was a little scared about what he’d gotten himself into.
Before the group climbed into the boat, the guide laid out the rules for a safe trip. The most important one, he said, was to listen for him to yell “DUCK!” When he did that, everyone was supposed to dive into the center of the raft and keep their heads down until he told them it was OK to look up. He explained that there were two reasons why they needed to do that:
- It would stabilize the raft during the roughest sections of the rapids.
- The guests didn’t need to see what they were dealing with anyway—it would just make them even more scared.
Since I heard that story years ago, I’ve thought about how “Duck!” is pretty good investing advice, too. Every investor’s life will have stretches of ferocious volatility, but you still need to ride the river to the end. When we’re going through these bumpy periods, what good does it do to watch your portfolio performance? They’re always temporary, so isn’t it better to duck and look up when things calm down again? Just as the rafting guide’s call to ‘duck’ stabilized the ride, our advice to focus on the long-term helps stabilize your investment journey.
The good news is that Hill Investment Group clients have clearly taken this lesson to heart. Our phones haven’t been ringing with every new piece of economic news or market swing. No one is panicking. This obviously isn’t your first trip through the rapids. So whether you look at your portfolio performance this month or keep your head down, I’m confident you won’t be swayed from the long-term plan we’ve built together.
Key takeaways:
- Stay calm during market volatility. It’s temporary and your portfolio is built for it.
- Trust the long-term strategy.
- Avoid being swayed by short-term noise.
As always, we can’t be sure how rough this stretch of water will ultimately be or when things will settle down. But we are committed to guiding you through whatever the markets deliver and keeping you focused on what truly matters—your long-term success. We deeply appreciate your trust in our approach. It’s what allows us to help you navigate the ups and downs with confidence.
Your client portal always has up-to-date portfolio performance available. So you can check on your portfolio any time you want, but it’s more than OK not to check those numbers. In fact, at the risk of telling you something you already know, you might not want to bother.
If you’d like to review your portfolio or discuss any adjustments to your strategy, please don’t hesitate to call or schedule an appointment.
Together, we’ll ride out the rapids and keep our eyes on the horizon.
