**Disclaimer and note: This article is a microblog intended as food for thought in simple share and snapshot hence digestible character count in form. When you think better you do better, that’s the point.
In relative topic, I’ll do a separate posts on the timing of when to buy and sell. Not a simple question to answer in one breath nor today’s topic. To today’s point: learning what is temporary vs what is permanent and making decisions accordingly.
People often confuse that which is temporary and that which is permanent – in many shapes and forms in their lives. I.e. What circumstances are temporary fluid (changeable) and those that are permanent (fixed/unchangeable). The idea of permanence often causes people to freeze if the notion of permanence is linked to scarcity or anything that’s a potential negative.
During uncertain times in the market the market often reacts in such a way that there’s permanence or damage being caused that’s irreversible. I.e. The coronavirus causing beyond repair to investment portfolios. In some cases damage / losses are a major deal and cannot be recovered near term back to their original form.
There are an incredible amount of externalizers to consider when making ANY decision, let alone investment decisions. Variables, parameters – ALL influenced by externalizers like the economy and the market’s reaction to what’s happening in the economy.
Rather than freaking TF out when fluctuations occur in your or your client’s portfolio’s ask yourself if the circumstance at hand is causing temporary vs permanent effects and when these effects may correct or offset. Next, ask yourself what your strategy is to weather, hedge or mitigate risk. Should you be a defensive investor and an opportunist, losses can and will be offset by gains because you are strategic.
I enjoy observing times like these as it brings to light those who are true, performance focused advisors/investors/teams, etc, who are looking forward and connecting the dots beyond any current pandemic (temporary circumstance that does yes, cause material impact). These advisor/investor types are responding not reacting in contrast to some who react in knee-jerk fashion or in the shadows, even when things in the market are on an uptick and going “right”. Distinctions get to be made among professionals. Times like these do so. Commends to all those who are steady and committed to their choices now and ongoing.