When we are building a portfolio for a client, we take a macro view rather than a micro view. We’re not trying to pick companies, per se, or even trying to pick industries. We’re trying to pick types of companies; for instance, we want large companies in the US, or small companies in the US, we want large or small companies in the international market, we want a global presence. In the end, what we’re really trying to do is we’re trying to promote peace of mind. What’s peace of mind investing? What gives you peace of mind as you’re investing? What allows you to let this thing grow?
The way I think about investing is the same way I think farmers think about planting crops: you plant, you till the ground, you make that ground ready to receive seed, you put seed in it, and you get a little sprout. When farmers see a little sprout, they don’t decide to pull it up and go--just a tiny sprout and it’s ready. That doesn’t happen; farmers know when something is mature and ready to be harvested. I think what many investors fail to do is to know when it’s time to harvest. They have this sense that they’re always in a hurry, and they just need to get what they can get and move on.
What we’re trying to do, on the other hand, is trying to induce a sense of peace of mind so that you’re not panicking about whether your sprout (so to speak) is growing or not. Just because I don’t see a “sprout,” or I don’t see a sprout where I thought it should be, doesn’t mean that it’s time to sell something. We’re trying to give you peace of mind: for us, that means that we’re going to give you every stock that’s available in a certain category, and we’re going to let you know that there are going to be some this year that are not going to do as well as others. There are going to be others this year that will be outliers in terms of how well they perform, and it will be different the following year, and the next year, and the next year--it’s going to be so different, that there’s no way to predict who’s going to do as well, or who’s going to do poorly. So, we’re just going to accept the fact that these companies do what they do, and we’re going to take solace in the fact that we’re investing in a company who’s investing in people, who’s investing in communities, who’s investing in an economy. We need to allow that to have time to work. We need to understand that there are ups and downs, and we’re going to be in a position where we don’t have to wonder if we chose the right ones. Instead, we’re going to say, “We bought them all. And there’s no reason to sell anything because they’re all good. Nothing’s junk. If there’s junk in here, it’ll find its way out. We don’t have to get it out. It weeds itself.” Let’s just trust the growth process, which are just ups and downs. There are turbulent times and peaceful times.
"I believe that the law of averages is way in my favor."
But regardless of what’s happening with the economy, or what’s happening with that particular type of index, we can be at peace. We don’t have to worry about it.
It’s like flying in an airplane. You know when you get on a jetliner, there’s a potential for that thing to crash, right? But you wouldn’t get on there if you thought it was going to crash. So, what you’re actually doing is saying, “I believe that the law of averages is way in my favor. I’m willing to pay $700 to have this ticket to go to this place, and I’m going to trust the structure of this plane, I’m going to trust the mechanics that got this plane ready and fueled it, I’m going to trust the piloting team, and I’m going to trust the steward team. And I’m just going to sit in my seat and strap my seatbelt. I’m going to pay attention to what they tell me, and then I’m just going to trust the process. Because I’m not flying the plane. When you invest your money, you’re getting on board, and you’re trusting the process because there’s nothing you can do about it. There’s nothing you should try to do about it. You can’t manipulate this, so, let the flight take place, and enjoy the ride.