(blog by Bill)
Any guess what the above picture represents? You might think it is the skyline of the North Cascades mountain range, a part of the state of Washington that is filled with jagged peaks and hanging glaciers.
More on jagged peaks and hanging glaciers later, but first, another story.
A friend of mine summited Mt. Rainier last Sunday for the first time. Climbing with his son, he reached the top of the 14,410 mountain at about 7:45 a.m. Ironically, I was on a flight from Seattle to Spokane, passing by the mountain at about 8:30 a.m. The mountain appeared to be socked in by clouds, and thought that if Bob and his son were standing on top (they were), they probably weren’t getting much of a view (they weren’t).
On the first day of his venture, while hanging out at Camp Muir, a climbing party was returning to base camp with a lot of commotion. It turns out that one of the climbers in the party, a climbing guide named George Dunn, had reached the summit for the 500th time. Quite an accomplishment, as described in The Seattle Times article. My two favorite quotes in that article are the following . . .
“He puts his head down and goes to work every day at the hardest job on the planet.”
And,
“But it’s not about the numbers,” said Dunn, a director at Ashford’s International Mountain Guides. “The beautiful thing about this job is the people I’ve met and getting to share lifetime memories with them. That’s why I do this.”
I got to thinking about that article, those quotes, and life in general. A lot of us could probably say the same thing about our careers, especially if we are having a bad day at home or the office. Sometimes you just have to put your head down and put one foot in front of the other, step after monotonous step, to make it through the day. In the end, it IS about the people you connect with, and the relationship you make along the journey, that brings joy and meaning to our lives.
I have tried to convey the same in my journey with The Coffeehouse Investor. I even share in the book a special climbing memory while summiting Rainier for the 4th time. I barely remember reaching the summit, but I do recall staring an avalanche in the face with my climbing party.
What does all this have to do with investing? Let’s return to the chart of the jagged peak leading off this column, which isn’t really a jagged peak, it is the price action of the stock market during the recent period of March 3 to August 6. Quite a scary adventure, for anyone who is following the stock market on a daily basis.
And it can be scary, especially if you are nearing retirement, or are retired, and trying to generate enough money from your social security, maybe a pension, and your own portfolio to cover those monthly expenses.
The stock market always has been, and always will be, a scary adventure if you follow it on a daily basis. The problem for many investors is that they had gotten lulled into a false sense of security during the period 1982 through 1999 when the market returned double its long term average.
Unfortunately, that 17 year period was an aberration, and today’s volatility is the norm. The past five months is what you are likely to experience for the next twenty years. That’s the stock market for you.
Is it possible to avoid it while still investing in it? Sure it is, and this is how you do it: Invest in it, and avoid it. More clearly, don’t follow the stock market and your portfolio on a daily basis. Get on with your life of putting one foot in front of the other, whether it is raising a family, building a career, or enjoying your retirement years.
Don’t sit down at the computer each night and look at the value of your portfolio. I can’t think of anything good that can come out of monitoring your portfolio on a daily basis. What is more likely to happen is you will get frustrated and confused about what to do next, watching your portfolio each day while reading the day’s financial headlines – half telling you that the market is going up from here, while the other half telling you the market is going down.
I share this with you from personal experience. I don’t look at the value of my portfolio more than four times a year, if that. What good does it do me? It only distracts me from my daily activities. I know I have my assets allocated in a manner that reflects my financial plan, and so I get on with my life – and you should too!
How often do you look at, or monitor the balance in your accounts? If more than once a week, do you feel it causes you undue angst during these volatile markets? We will send a copy of The New Coffeehouse Investor to the first three investors who respond to this blog.