Discipline, Patience, and Indifference

June 15, 2022
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Note. BH Wealth Management are Strategic Partners to Guided Professional Solutions.

In our nearly 30 years as investment advisors, we have found that the most beneficial traits for investors to

exercise during prolonged difficult markets are Discipline, Patience, and Indifference.

 

Discipline refers to sticking to your strategy. Investment strategies and portfolios are designed

to handle the uncertainties of market movements. While market movements are mostly

uncertain and unpredictable, we can be more certain in predicting that markets will have times

of growth and other times of contraction, just like economies. Discipline is a virtue because it is

difficult to do, especially in challenging times. In tough times it is discipline and having a philosophy that steady the ship.

 

Patience is essential because negative news and outcomes may persist longer than we would

like. Many investors can handle a period of negative outcomes. Successful Investors have the patience to outlast the trial. Both in the dot com crash of 2000 and the Global Financial Crisis, many investors threw in the towel after experiencing losses and negative news for over a year…and ultimately missed out on the recovery.

 

Indifference, it is fun to watch our portfolios increase in value during good times but when the inevitable downturns occur, watching often can tempt even the best investor to make unwise investment decisions. Couple downturns with the constant negative bombardment from the media with the crisis of the day and you have an environment where one could be making Long-Term decisions using Short-Term information and that rarely leads to a positive outcome. 

 We as Advisors are also experiencing downturns in our own personal portfolios, no one is immune, although we have to keep a diligent eye on our client’s portfolios we would not be honest if we did not admit that there are times where we do not check our own balances often and practice Indifference as a personal investment strategy. We can't be affected by those things we don't know about. We like to think of indifference as "strategic ignorance.” 

You have a plan and investment strategy that has withstood numerous downturns and crises. No investment strategy is immune to temporary losses. History has shown that Investor Behavior has had a significant impact on an Investors personal returns. Getting in and out of the markets at the wrong times and missing many of the best days has historically resulted in inferior returns for Investors. 

 The real question here is not what the market will do, but what you will do. Will you choose to exercise discipline, patience, and indifference? We certainly hope so and are here to help you do it. This will put us in a position to weather the storm and potentially invest in high quality companies on sale, which could ultimately reward you down the road.

 We are here for you. We hope these words offer valuable perspective. Let us know how we can be of further help

 

Best wishes,

 The Advisors and Staff of Guided Professional Solutions, LLC