Ignore the noise. Don’t get emotionally involved. Stick with the plan. This is essentially our mantra in managing our clients’ portfolios.
Don’t get me wrong, I don’t for a minute take this for granted. It can be a very difficult thing to do, especially when it feels like everything around you is falling apart. What I have realized is this advice can be relevant to other facets of life. I encountered it very recently.
Early this past Monday morning (1:30am), I arrived back from the Philippines. It was myself, my two eldest kids (Maeve, 9 and Christian, 8), my cousin and her family and a couple of aunts and uncles. We had been in the Philippines for two weeks, and each week was a completely different trip.
Our first week was amazingly busy. 3 different islands over 6 nights. 10 hours of driving to different exotic locations. There were enough experiences to fill the entire 2 weeks of our trip. And then, everything completely changed…
As the world evolved around COVID-19, so did our trip. Cities and towns were designated under lockdown. Tourist attractions closed. And, the news got worse on a daily basis. Our resort underwent its own lockdown and we started our own version of self-quarantine. There were only 10 rooms in this resort, 9 vacant (we were the only guests remaining). This was going to be our lives for the next 8 days and 7 nights.
Unable to leave the grounds, we were afforded too much time to stay “informed”. We were glued to our phones, soaking up every new bit of information. And it wreaked havoc on our emotions. From loved ones, to the prime minister, the pleas of “come home now” were debilitating. The closing of cities and towns in the Philippines was frightening. Military personnel, toting automatic weapons manned checkpoints at the entry of every village. Were we doing enough to try and get home. Was it even possible?
I capitulated at the announcement of the 72 hour window to leave the country. Our scheduled flight to leave was on the bad side of the window. However, there was a glimmer of hope. Our airline indicated that they were in discussions with the Philippine government concerning the status of flights outside the 72 hour window. There was still a chance.
On March 20th (first day after 72 hours), the airline announced that flights from the 22nd (our scheduled date) to March 31st would be operating. We were elated. But, was this just a dead cat bounce? I tried not to be too excited and stopped counting my chickens. Up and down, my emotions ran in tandem with the market.
On March 22nd, ecstatic on our way to the airport, we received an email stating that our flight was cancelled. Not again! Following our agonizing 4 hour wait to speak to an airline ticketing agent, we were told that the earliest flight to reschedule was April 2nd. Nope, not happening. The thought of another 11 days in the locked-down country was unacceptable. We were successful in scrambling to find another flight, leaving that day, in 2 hours, with 2 stop overs. After 22 hours of travel time, we touched down at YYZ at 12:01am Monday, March 23rd.
This experience has reminded me that, as easy as it is to preach, you cannot begin to feel how emotions affect an individual, until you experience it yourself. I have a renewed sense of empathy for people feeling anxious about markets, health or personal finance.
In the end, my ultimate goal was achieved – I was able to come home on my scheduled date. However, it was much more stressful than necessary had I not involved myself in the day to day rollercoaster ride of the news. Similar to investors’ experience in the market. Ignore the day to day noise. With a proper plan and a sound investment strategy in place, your ultimate goal will likely be achieved with a more enjoyable journey.