Good Afternoon all and Happy Mother’s Day to all the mom’s in our family ,
COVID 19 created an “active” investment manager’s dream scenario since there were sectors of the economy that thrived during pandemic-driven lifestyle changes, in contrast to other sectors that were seriously disrupted. In the face of a prolonged market recovery and the prospect of a return to “normalcy” we receive many questions about what index or asset class will outperform next? The response to that question should reflect your long-term investment strategic plan. The perils of reacting on a short-term basis are vividly depicted in the table below that demonstrates the hazards of selling during panics, and the rewards that come to those that “stay the course.”
At Park City Family Office, we discuss the importance of setting time horizons, consistent with goals; both of which help to inform an investment strategy. We then “back test” a strategic plan tailored for your family through Monte Carlo simulations to display how a portfolio is structured to withstand downside risk. And since life and markets both bring unexpected changes it is our practice to periodically revisit your strategic plan.
Remember, “timing the market” takes two good decisions: when to get out, and when to get back in. Having a strategic plan only requires one good decision: The decision to create a strategic plan that can, with our help, be periodically refreshed.
We hope this helps resolve the question of “where to next”. And the real good news is that the weekend is what’s next for all of us. Enjoy!
Morgan Irvin & Bruce Greenwald