Scott Sheppard
March 07, 2022
Tactical Growth Mandate - Weekly Briefing
Reframing the way one thinks about a problem can be pretty tricky. Normally we learn one way to deal with a problem and accept it as satisfactory. When it comes to investing, we were all told at some point in our journey that markets go up and down regularly and that you need to just focus on the long term as the market always goes up over time.
In general, that has been true in most developed stock markets, but you need to ask yourself: how long am I willing to wait for a dip to rebound and who am I benefiting while I wait? Putting on one’s detective hat and digging deeper could help you reframe your initial beliefs and actions.
The idea behind the Tactical Growth strategy is to achieve above average rates of return by playing offence AND defense. The legendary football coach, Bear Bryant, famously said “offence sells tickets, but defense wins championships”. I look at investing the same way - am I likely to be most successful if I’m only on the offence all of the time, or do I need to take defense seriously too?
This week my inbox was littered with the same rhetoric you’d expect to get during any major sell off: “Markets have usually rebounded quickly after past military invasions”; “You don’t want to risk missing the best days in the market”; and “Stocks always go up over the long term”. Try riddling off those words of comfort to investors in the Russian stock market who have lost 77% since Valentine’s Day…