Investing requires an investment plan that is implemented in a disciplined fashion.
Here is part 1 of our 3 part series on investment plans:
About WealthFactor: A Lake Oswego based investment adviser and wealth manager serving local high net worth and ultra-high net worth investors. Founded on the idea that high fees force unnecessary risks when providing investment advice. By leveraging the investment methodologies of the largest passive and rules-based asset managers, WealthFactor seeks to pass on the benefits that efficiency provides through financial technology on to its clients. WealthFactor offers custom investment advice services conveniently through separately managed accounts in each investor’s name. For more information visit www.wealth-factor.com.
About Bill Woodruff: WealthFactor’s founder has been investing in publicly traded financial markets for over 20 years. His career includes founding an alternative investment manager, launching and managing a mutual fund and serving as a managing director of a publicly traded investment manager. With over a decade of experience serving high net worth investors Bill’s skillsets uniquely blend an understanding of investor needs with an extensive background in financial markets and investing.
0:07 Hi, I'm Bill Woodruff, founder Chief Investment Officer at WealthFactor. 0:11 Today I want to talk about a structure for thinking about the current volatility in financial markets and how I think it's important to create an investment plan, both from a long term time horizon, as well as just simply navigating and dealing with the exceptional amounts of price volatility that we're seeing. 0:33 It's important to think about the practical challenges of timing decisions, regardless of what they are. We're practically not going to time the bottom. If that does happen by random chance, that's luck, not skill. It's important to think about that. acknowledge that and move past that. 1:00 It's my belief that once investors get past the point of uncertainty in their emotions relative to the coronavirus, we will see markets revert very, very quickly I expect this to very much be a "V" like movement in prices. The challenge, both in terms of attempting to time a bottom as well as the "V" movement is there's really no way to know when that's going to happen. Is that gonna happen tomorrow? Or is that going to happen three months from now or 18 months from now? 1:33 That's the unknowable question. 1:36 Making an investment plan helps you avoid the challenge of being uncomfortable when you're making the buying decision. I believe that once you're comfortable again in making an investment in current markets, it'll be too late. 1:55 So with all of this, should we be afraid? I would argue No. The lower prices go, the less risk, I think there really is. I don't think that we're at risk to the value of what's probably the most valuable asset across the world, which is the ability for US companies to create goods and services and produce profits from that activity. That I believe is the most valuable thing in the world or one of which, and there's a floor to the value of what that is. And to further look at that, I think there's the relative value of that versus other things that's going to further put price support underneath that. 2:04 What I mean by that is global Treasury or sovereign yields are zero or near zero around the world. The lower the prices go in US equities, there is an incredible relative value difference or relative potential return difference, and I think that's going to put a significant amount of upward price pressure on US stocks or global stocks once we get through this panic. 3:06 Ultimately, it's my belief that you need a plan in order to maximize the success of investment outcomes.