Patience and Courage
By PDS Wealth Management on March 20, 2020
Almost 3 years ago our partners made an important decision born of the desire to serve our clients free from distraction. Exercising a good bit of courage, we founded PDS Wealth Management.
Recent events have me feeling especially grateful for our tight-knit group. During an uncomfortable period in our country, operations from our 3 locations have continued without interruption. While we have begun practicing “Social Distancing” for the safety of our families and fellow citizens, our commitment to clients has been continuous.
Some readers may be familiar with the four pillars of our firm’s Investment Philosophy: Simplicity, Transparency, Economy and Patience (STEP).
Early in the fourth pillar rests an important line:
“We believe that an investor must have the patience to wait for, and the courage to invest during times of distress.”
For years many investors have practiced “patience” to a fault, perhaps kicking themselves as stocks gradually ticked up while they sat on the sidelines. Others chose not to wait; FOMO became a popular term among financial pundits as money chased stocks making new highs on a seemingly regular basis. In between were investors who carried a portfolio appropriately pointed at their goals. Those with long time horizons and the ability to contribute regularly invested more aggressively than those further along the path of life.
Enter distress. Almost 4 weeks ago, our world as we know it was upended by a black swan in the form of a novel virus. Hysteria has swept into financial markets as investors worldwide attempt to put a price on the sudden halt of global economies. Central banks and government bodies have scrambled to inject liquidity into capital markets and provide relief packages to citizens. Amid so much uncertainty, distress has prevailed.
Now comes the hard part, courage. While we don’t know the future, history has taught us that the competition for bargains is easier to win when fear prevails. Our website simply states that “price is more volatile than value” and we believe that the ability to recognize the difference is paramount to building a durable investment portfolio.
There will undoubtedly be companies and investments that do not successfully navigate this turbulent period. Many will not look the same on the other side, some will cease to exist. Others will remain disciplined and adapt, growing their earnings for many years to come. Our job as advisors is to help you filter the noise, focus on your goals and seize opportunity with courage. As always, our portfolios aim to be durable, not predictive.
Tommy Parker, CFA®
Director