Our Perspective: The Importance of Maintaining Perspective

The return of volatility in the markets, the threat of a heightened trade skirmish, and the hit the technology sector took on the heels of challenges to Facebook and Amazon, have kept market commentators busy churning out vivid headlines and analyses. It can be unusually difficult in moments like these for investors to hold onto the composure and maintain the perspective that are critical to achieving their financial goals. We recently read a piece on this topic by Ben Carlson, an author we personally know and follow, that we think you might like as well.

“On The One Hand…” is a clever, powerful argument for the importance of maintaining perspective and remembering that whatever is happening today is also part of what will have happened this month and then this year. Very few things are as dramatic or absolute at a distance as they seem up close.

The article juxtaposes things that are true in the moment with a piece of wisdom, historical comparison, or counter-truth that softens the drama of the initial observation by placing it in a broader context. Carlson even pulls in some cultural juxtapositions to help drive home his point. We like the humor Carlson injects with qualifications like these. They also provide exactly the type of context and perspective for which he is arguing, a position with which we couldn’t agree more.

You have heard us say this before: successful investing is about taking a long-term view and having the discipline to understand that every market event is part of a fluid narrative that includes the past and extends into the future. No one can predict exactly what will happen tomorrow, but maintaining perspective, pulling our sight up from the present, will help us prepare.

One of our main jobs as advisors is to help our clients maintain a healthy perspective on the markets and their investments. The diversified portfolios we build are designed to help our clients progress steadily towards their goals through calm periods and through volatile ones. While current events can and do sometimes require us to make adjustments, their impact is often far less extreme when understood in a broader context.

The best way to make sense of things like sudden volatility or a terse exchange between foreign leaders is to take a step, or three, back and reset your sights on the big picture. Everything looks very different when viewed from two feet away.






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