In July, when our valued associate Meredith Mercer returned home from summiting two four thousand-meter peaks in the Alps, we published a blog titled Lessons Learned on the Path to the Summit, recounting how her experiences while climbing mountains are very similar to how we achieve our goals as people, teams, and investors.

Fast forward to the present, she has trekked to Mount Everest Base Camp, and most recently, climbed three volcanoes in Ecuador ranging from five to six thousand-meters – Antisana, Cayambe and Chimborazo.

In our team meetings, we often ask her to compare her experiences climbing in different parts of the world. Her answer is that no two challenges are alike, but the tools you use to solve them are the same. The more you climb, the less fear you have, and the stronger the strength of your “toolkit”.

For example, on her latest adventure in Ecuador, she experienced the collapse of a snow bridge and significant headwinds, amongst various other challenges. She reflected on how 5-years ago, she may have let these temporary setbacks cloud her judgement on her larger goal of strengthening her climbing abilities to ultimately reach all seven summits – the highest mountain on each continent.

We discussed how crevasses and weather challenges are a parallel to periods of short-term uncertainty for investors. Similar to how Meredith has confidence in her long-term mountaineering goals, investors should have the same determination when faced with temporary setbacks.

To illustrate this, consider Warren Buffett, the richest investor of all time. Throughout the period of 1953-2022, beginning 11 years since he purchased his first stock, and not including the 20% decline of 2022; Warren Buffett saw the S&P 500 fall by 20% almost 12 times. On average, the 20% declines lasted 354 days, measuring the market high to market low.⁽¹⁾

Of these 20% declines, no two were alike. He experienced stagflation in the 1970s, the dotcom crash of 2000, the 2007 financial crisis, and the COVID-19 pandemic. His success in navigating each of these cases came from the tools he had developed through his experience and trust in his long-term goals.

Macro-economic events around the world today, namely political conflict and interest rates, provide many reasons for investors to second guess the process. We have never seen environments like those of today, but with confidence, experience and a long-term strategy, investors are best suited to achieve long-term goals.

We look forward to keeping you updated on Meredith’s journey to reaching all seven summits!

References:

(1) Capital Group. (2023). (rep.). Keys to Prevailing Through Stock Market Declines. Capital Group.