Famed investor Sir John Templeton has a quote that has stood the test of time:

“The four most expensive words in the English language are: This time it’s different."

 

Since the start of the Trump administration’s chaotic tariff-based economic policy, global investors have faced a high level of uncertainty not unlike several historical geo-political crisis periods in the past. The result has been negative headlines and emotion, elevated volatility and the temptation to “do something.”

 

However, over-reacting in periods like this often creates more harm than good. Trying to tactically time the market is a strategy that has failed even the most sophisticated investors. The chances of getting out and back in at the right time are incredibly low. If you miss a few of the best days, your long-term returns can suffer significantly. Consider the chart below:

 

 

The most important action one can take in times like these is to remain anchored to a long-term plan and remember that market drawdowns are only temporary. Despite wars, recessions, pandemics, political crises, and countless “this time it’s different” moments, the long-term trend in wealth creation has been upward over the long-term. The chart below illustrates that if we pull the lens out wide enough, we can see that bull markets last much longer than bear markets and deliver much larger total returns. However, taking advantage of this requires patience and an understanding that sometimes we must be comfortable with being a little uncomfortable through infrequent and short periods of market volatility.

 

 

We remain focused on long-term fundamentals and the discipline embedded in our investment process. We do our best to avoid overreactions to the headlines or speculation, and overt market timing. We stay invested according to each client's objectives and risk profile, and continue to maintain diversified mutli-asset class portfolios. Today's headlines and political turmoil are unique in their own way, but it's not so different as to be unrecognizable from other catalysts for volatility that have preceded them. Our steady and researched driven approach has guided our decisions through countless cycles over 30 years and will continue to do so in the years ahead.