How long exactly is the long view? We found the perfect quote from Letters to a Young Poet to help answer that question.

“Ten years are nothing.” You will often hear the team at HIG use this exact phrase. When we say ten years are nothing, we mean that even ten years’ worth of data can be noise. If you look at the last ten years of data alone, you will see the ups and downs of crazy S&P 500 performance.

“Stands confidently in the storms of spring, not afraid that afterward summer may not come.” This line resonates with us because HIG clients have confidence, even in tumultuous times, knowing that taking the long view is the closest thing to certainty in investing. The longer into the future you go, the closer you get to 100% certainty of a positive return.

“Summer…comes only to those who are patient, who are there as if eternity lay before them.” Our clients will tell you that the long view is “longer than your lifetime” because we help them plan for the legacy they will leave that will continue on with those who aren’t even born yet.

“Patience is everything.” We continue to help our clients remain patient and look to the future when they will reap the benefits of remaining steadfast in their long view efforts.

Worry is a terrible strategy for solving problems.

But I have a confession to make: for a very long time, it was the only one I knew.

For example, each time I wrote a column for The New York Times, I was worried my editor would say, “Sorry, Carl, this just isn’t very good, I’m afraid that is the end of the Sketch Guy.” And then I would have to crawl under a rock, never to be heard from again.

I would bring my worries to my business partner (AKA wife). I would go on and on about, “What are we going to do if this happens?!” And when she seemed totally calm, I would say, “Aren’t you worried?!”

Because she’s generally unflappable, she would say, “I could be, if you want me to be, but I don’t see how it would help.”

It might feel like worrying helps. But as Shantideva put it:

“If you can solve your problem, then what is the need of worrying? If you can’t solve it, then what is the use of worrying?”

Worrying endlessly about something that may or may not happen in the future doesn’t help. But making a plan for what to do if that thing comes to pass does.

So now, when I catch myself starting to worry—which is often—I try to sit down and make a plan. And then I take that plan, file it away, and stop thinking about it.

That’s it. I don’t need to worry about that scenario anymore, because I have a plan.

Next time you find yourself in one of those cycles of worry, remember what Shantideva said. Action is a strategy, worry is not. So make a plan, put it away for safekeeping, and get back to work.

This is the latest in a series of posts from Rick. To see prior entries click here.

Once I’d experienced the benefits of an evidence-based investing approach myself, I started thinking about my clients back at the brokerage firm in 1967. How much better off would they have been if these tools were available to me, and in turn, them? With my newfound knowledge on how to truly help people, I decided to take the first step in realizing a dream. I left Anheuser-Busch in 1997, started earning my Certified Financial Planner (CFP) designation, and became a financial advisor at Buckingham Asset Management in St. Louis, Missouri

At Buckingham, I met Matt Hall, and after six years working together, we decided to start our own firm. Launching Hill Investment Group in 2005 allowed me to utilize everything I’d learned about both the evidence-based and emotional sides of investing. However, there were still important lessons ahead for me.

Like the best advisors, we always encourage our clients to focus on the long-term, not the market’s daily, weekly, or even yearly movements. Most people think “the long-term” means five or 10 years. However, as we discovered during the early days of Hill Investment Group, even a decade isn’t a significant amount of time in the grand scheme of a long-term investing strategy.

We couldn’t have known that we were launching our firm right in the middle of what’s now known as the “lost decade.” For the 10 years between 2000-2009, the S&P 500 had an annualized negative return of −0.95%*. Yes, the entire first decade of the 21st century netted a negative return as measured by the S&P 500.

The 2007-2008 financial crisis contributed to those poor results. An internationally diversified, evidence-based portfolio with exposure to small and value stocks helped our clients get through that period in great shape compared to investors focused on large-cap, U.S. stocks. What may be more important is what happened next: Between 2010 and 2019, all markets went on a sustained bull run, with the S&P 500 delivering a 13.6%* annualized return.

Talk about a huge swing over two consecutive decades. Even people who thought they were “long-term investors” might have reached the end of the lost decade thinking that their investment strategy wasn’t working and decided to change course. Doing so would have cost them dearly if they didn’t participate in the next decade’s rebound.

Lesson learned: The long-term is the rest of your life.

Sticking with a long-term investing plan requires discipline, including the discipline to weather a decade-long period of underperformance. Some people may focus on one goal or milestone to keep them on track, like wanting to retire at age 65. While that’s not a bad thing, the most successful investors are the ones who recognize that they’re working toward multiple financial goals—including significant expenditures during their working years like college costs and home improvements. To meet all these disparate goals, one must adopt a lifelong commitment to saving and investing through all market conditions. All of this is much easier with a trusted advisor…even better with a trusted team of advisors.

No one can accurately predict all the various things you might want to do with your savings 20, 30, or 40 years from now. Life throws all kinds of surprises our way. Some bad. Some fantastic. When you reach one long-term goal, new ones often magically emerge that become just as important to you. That’s why the real objective of one’s investment strategy should be to reach a point where there are opportunities to do almost anything you want for yourself, your family, and even for others.

I’ve witnessed how rewarding it can be for clients who embrace this approach. They’ve met the goals they set out to achieve for themselves with plenty left over to do some incredible things. Many of them are now supporting their grandchildren’s education or making charitable donations with their excess savings. One client’s wife was diagnosed with Alzheimer’s disease, inspiring him to provide major funding for Alzheimer’s research.

In other words, there will always be reasons to keep saving and investing. As long as you make good decisions based on what you can control, let the markets do what they’re going to do, and avoid meddling with your portfolio, you will likely have a lifetime to enjoy the results.

Improving your own investment experience

It’s easier than ever to start investing. You just need some money and a brokerage account or an app on your phone. The question is: will you be a gambler or an investor. There’s a huge difference.

Becoming a good investor isn’t easy. Many people struggle through experiences like the ones I’ve had myself over the past 50 years and never find a way to move past the stress and anxiety that they feel.

My hope is that these stories help you see how changing your attitude toward investing and the approach you follow can truly improve your quality of life. After all, that’s why people invest in the first place—to make their lives, and the lives of others, better. That’s the most important “return” you can achieve.

If you’ve followed along this far and are not a client already, I have one question:

How can we help you? Click here if you’d like to set up a time to talk.

*Returns data from https://ycharts.com/indicators/sp_500_total_return_annual. Past performance is not indicative of future performance. Principal value and investment return will fluctuate. There are no implied guarantees or assurances that the target returns will be achieved or objectives will be met.  Future returns may differ significantly from past returns due to many different factors. Investments involve risk and the possibility of loss of principal. The values used were obtained from sources believed to be reliable.