While the storm is raging today, we want to reassure you that we are prepared. When we designed your plan and portfolio, we were careful to understand the need and purpose of every dollar invested. Money that is needed for short-term priorities or as a buffer to financial challenges is protected. We have cash, short-term bonds, insurance strategies, high-grade municipal bonds, and other protected holdings. All of those allocations are steady and performing as expected. They are the anti-lock brakes, air-bags, and seat belts of your portfolio designed to keep you safe
We endure the spikes in volatility because we are confident that owning these assets will reliably grow our money. We buy the stocks of hundreds of successful companies across the world that provide the technology, food, travel, healthcare, energy, and financial services that we all need and use every day. These are not speculative concentrated gambles; these are widely diversified holdings in profitable, sustainable companies. Recently, we started using hedged allocations that use options to protect against downside risk. While prices are moving today wildly, the long term economics of these holdings has not drastically changed.
Many market events like this throughout history have taught us what to do when the storm is raging. It runs counter to our most profound human instincts, but shedding volatile stock positions at a time like this is the surest way to turn temporary price movements into a permanent loss of capital. So, we need to be prudent. Being prepared for events like this means not having to sell when prices are down.
We anticipated that days like this would come, we are confident in our plans and processes, and we will be, as always, looking for ways to help you achieve your financial goals.