Investing can be stressful, however with financial science as a “north star” it becomes sustainable and palatable provided that one is optimistic and believes that on average, progress is made (albeit slowly at times).
The hard part comes in constructing a well-diversified portfolio that you can live with through good times and challenging times. Markets reward those who are patient, but the patient must endure difficult times to get the higher returns than bond/cash alone have to offer. This is why equities have had higher returns — because equity owners have been compensated for the risk/uncomfortableness that is associated with equity investing.
A globally diversified equity solution along with bonds and cash can increase your wealth. The important point is, let the power of markets help you!!!
We can only help people who want to be helped. A lot of people come to us and say, “Hey, I want to make some money,” but they put up all these hurdles, like “I never want to have a down, losing month, so I don’t want any volatility.” In order to help somebody, they have to accept the fact that there will be volatility or price fluctuation.
There will be storms. But that is the nature of investing, and that is why we act on financial science. Everything else people see or read about in the headlines is information that has been priced into the markets. People put up these hurdles for themselves to avoid uneasiness, so we try and help people overcome this through the science of financial investing.
To be a successful investor, most people need constant coaching. They need a temperament of believing that, in aggregate, with seven billion people on Earth working hard to make lives better, make money or starting businesses, progress will be made.
We can show people graphs and charts, but what happens is they’ll look at a chart in the 1930s or ’40s, or whatever, and then say, “Oh, I could live through that,” but living through it in real time is very different than looking at a chart.
Rather than looking at charts, look back in history and think about how people lived a hundred or a thousand years ago. Since progress is continuing to be made on technology, social issues, and/ or humanities, then you could reason that progress will continue.
Be optimistic, and use financial science as your guide to navigating global markets for your benefit!
Jeff Holland | VIAIV