The first thing my office manager said to me this morning was, “You don't sound normal.” (She did say Good Morning first) Well, I don't. My voice is somewhat lower than usual, and I might also have some redness in my eyes because I've come down with a cold. I am taking all the defensive measures that I can possibly get my hands on. Now-a-days, everyone is concerned about sicknesses and wondering if other people have COVID. This is what I would like to discuss today: normalcy and testing.
For the first time, I did one of those at-home COVID tests, two of them actually, because they say COVID can appear to be just like a cold. What I didn't realize is that you must need to have a degree in chemistry to do these. You have to make certain that the proper bottles were used, the swab was twirled over here just enough times and over there just the right number of times, then it had to be twirled inside the bottle that you had measured and put together, and you needed to take the three drops and put them into the little test kit. I read the whole thing through first and it still was confusing. Then very, very slowly, I literally went step-by-step to get my negative results. So, I know that what I have is a cold. I'm still scratching my head because I can't figure out how I even got the cold. I am always so cautious each and every day to make certain that I stay as healthy as possible.
What does this have to do with investing and the real world? The real world, when it comes to investing, requires a lot of mathematical calculations that the vast majority of people cannot even dream of doing. Even at our office, I look at how we look at the numbers every single day. We have these complex charts and excel spreadsheets and color-coded graphs and line bars showing exactly what's happening in the market. Not only “the” market because I don't know what “the” market is, there are multiple markets depending upon what you are watching and where you are investing, but I do know that the vast majority of people actually react and make their financial decisions based upon their emotions and this is where wisdom comes in handy and the amount of time that I have spent learning how people think.
I will often tell the story of what happened in the late 1990s, and the vast majority of people who are investing today don't remember this or were perhaps not old enough that they could have been investors during that time. However, I remember it as if it was yesterday because it was the time of the “Tech Boom.” Things were going up quickly. In fact, during that period of time, we would have clients say that if they couldn’t get a 15% rate of return year after year, they were going to go someplace else. That kind of high return became the norm. I could literally pull-out advertisements from large companies like vanguard and fidelity from the paper that showed some of their funds doing triple digit returns on an annual basis. Not double digits, triple digit returns. If you were following the numbers, then you just knew that at some point in time the shoe was going to drop and reality was going to come back into play. So, after many of my clients had received triple digit returns in parts of their portfolio, I told them that it is time to stop being greedy. So, I remember over several evenings calling clients to tell them that it was time to get out. There was no way to guarantee that we were going to get them out at the very top, but with the amount of money that they had earned, it was time to say enough already. So, I made phone call after phone call after phone call. The most difficult part was what I would say afterwards because people would then ask where I would suggest that they put their money next. I would say ask them if they remember the saying of buying low and selling high and that it was time to get out high, and then I would give them an assortment of funds that during this same period of time that their current funds had received triple digit returns, those funds had gotten double digit negative returns. Well, the way it actually played out, at that time it was a good move. We got out near the high, and we got in for these other investments near the low.
Here's the thing, when I had this conversation with every single client, there was a look on their faces that said, “You've got to be out of your mind.” Even though this was something that we've always heard on a regular basis to buy low and sell high. It's an easy thing to talk about, but it's a difficult thing to do. It's difficult like trying to do an at-home COVID test: Am I getting it right? Have I made the right choices? Am I getting the right response? Am I receiving accurate results?
This is a good thing for us to talk about this time of the year. As 2022 is ending and 2023 will soon be upon us, try to move forward and not make decisions based on emotions. Realize that we have your back. What I mean by that is that we are testing. We are researching. We are looking at your accounts because that's what we do. That's our job So, as we get together in the new year and we review how 2022 transpired and as we look ahead, let's plan together. Let's work together and let's hope for the best in 2023.
Thank you so much for allowing us to be part of your team and allowing us to help create a better life for you this year in 2022.
