The “I’s” had it across the first quarter, as inflation and interest rates continued to dominate popular financial headlines. That is, at least, until the Silicon Valley Bank meltdown took over, followed by the government’s swift reaction to the same.
What should you make of the quarterly news?
If you’d missed these events in real time, you may not even have known they’d happened. At quarter-end, inflation continued to simmer on the back burner, as it has for some time. For the ninth time in a row, the Fed raised interest rates, most recently by a quarter point. Once again, many markets ended the quarter up, with big tech stocks leading the way. And to date, widespread bank runs have not materialized.
This suggests, as usual, your best bet is to lead with two different kinds of “I’s.”
Investment Stamina:
A third “I” is our investment strategy, clearly focused on the market’s distant event horizon. A recent Vanguard Expert Perspective described how breaking news otherwise tempts us to react as if we’re being chased by a grizzly bear:
“[Y]our body and attention is 100% focused on the next second or maybe 30 seconds, but certainly not your plans for 10 years from now! Understanding that anxiety, fear, and pain shorten decision horizons not only increases the motivation to better curate your news feeds and turn off ‘junk news,’ but it also increases your awareness to hit pause when considering significant decisions.”
Put another way, across bear and bull markets alike, having a long-term investment outlook as our front-and-center guide better positions us to make thoughtful decisions amidst shifting news.
Individual Pursuits:
When should you buy, sell, or hold particular positions? When is it time to reduce your exposure to market risks, or increase your ability to seize hoped-for rewards? Why are you investing to begin with?
In large part, the answers are found in your fourth “I,” your individual goals.
Speaking of first quarter news, for more than a half century, Berkshire Hathaway’s Warren Buffett has been dispensing words of wisdom each first quarter in his annual Shareholder Letter. Here’s a gem from his most recent release:
“The disposition of money unmasks humans.”
Isn’t that so true? How we choose to accumulate, invest, spend, and share our personal wealth says a lot about us.
What does your investment portfolio say about you? As long as it’s already structured and managed to mirror your goals, your values, and your personality, we suggest staying true to yourself and your investment plans. Buffett offers some fresh advice on that as well:
“The lesson for investors: The weeds wither away in significance as the flowers bloom. Over time, it takes just a few winners to work wonders.”
As always, please let us know if we can help you look past the distracting weeds of the daily fray. In the meantime, we wish you and yours a bountiful spring.
Become empowered with a plan
We remove the complexity
Past performance is not indicative of future results. The material above has been provided for informational purposes only and is not intended as legal or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Information obtained from third-party sources is believed to be reliable though its accuracy is not guaranteed, and TVAMP makes no representation or warranty as to the accuracy or completeness of the information, which should not be used as the basis of any investment decision. Information contained on third party websites that TVAMP may link to is not reviewed in their entirety for accuracy and TVAMP assumes no liability for the information contained on these websites. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from TVAMP. For more information about TVAMP, including our Form ADV brochures, please visit https://adviserinfo.sec.gov or contact us at (865) 226-9982.