Setting a Course

I am not quite certain that I’ve ever felt like this.  Being born in the 60’s, I escaped that decade of turmoil.  Having served in two wars, losing both parents at a younger age, and raising a family of my own should prepare me for handling volatility and uncertainty.  But, right now feels drastically different in so many ways.

There are many issues of concern and contention that are in the forefront:  COVID, the election, the recession, the protests, the riots or even simply the ever increasing volume of everybody yelling that leads me to this feeling.  I am having difficulty identifying the truth from the lies.

A vital, yet simple tool that I learned to trust while a young platoon leader in the Marines was a lensatic compass.  In the middle of the woods or the desert you could trust that the arrow would, without fail, points north.  It looked like an old flip phone, akin to Captain Kirk’s communicator on Star Trek.  When closed the arrow was locked in place.  When opened the arrow was free to spin; and when free, it would continually seek north bouncing left to right of north finally stopping on it.  Once you had north, you had every other direction from there, and no matter your direction you could advance towards it.

It seems right now that my compass needle is unsettled on finding north.  It keeps swinging from side to side, never stopping.  The external feed from the news and our world is interfering with my compass.  While I know who I am internally, I trust my core beliefs and then know the direction that I want to go; those external indicators that tell me what direction is in front of me are all over the place.

When the direction is unclear I have learned to apply these thoughts:

• Don’t Chase A False Reading- Walk in the general direction that the arrow is trying to point.
• Be Cautious- Avoid running to avoid painful stumbling.
• Use All Your Tools- Sift other sources of information as a blend usually builds a reliable sense of the correct direction.
• Trust Yourself- Do not rely on the crowd to lead you to the right place. Collective wisdom is valuable but discern for yourself what is correct for you.

Have a plan- Know what to do when a course correction is necessary.  Reacting in the thick of turmoil is not ideal in decision making.  Emotional decisions are fraught with danger.  Have your plan and calmly apply the steps that you trusted enough to put in place before the turmoil.

The same advice that helps us navigate the issues of the day also apply to our finances.  Your goals and financial direction in life are there to work towards even in the tough times.   Spread your assets out through diversification.  Long term assets should stay invested according to the plan.  Ensure that cash is also part of your plan right now.  Be ready for the emergency or even the right opportunity, when either arrives.

The external world seems chaotic.  Someday, just like the 1960’s, this period will be in the history books, and we will be dealing with other disruptions. Talk with your spouse and your friends about how to handle these external distractions.  Share your concerns with your professional advisors.  Make or revisit your long term goals list and the plan built specifically for those goals.  Revise the plan as needed and keep moving to the goals.  North is still out there to give us direction.  We might simply have to look a little harder to find it right now.

Tim Eichhorn is a Partner and Senior Advisor with Rather & Kittrell.