This summer, like many of you, my family headed to the beach.  There is something special about where the land meets the sea.  According to the US Lifesaving Association, in the US alone 400 million people visit the beach each year.  The most common vacation spots around the world are the coastal regions.  From Ocean City Maryland to the Seven Mile Beach in Jamacia or Long Beach Island off New Jersey to the Chat n Chill off Exuma – the options are endless.  The impact is more than just an picturesque view.  A 2021 study by the Barcelona Institute “saw a significant improvement in participants’ well-being and mood immediately after a walk in the blue space.”  It is believed that the lack of visual input helps to calm the mind.  There are no skyscrapers or litter, red lights or break lights at the beach.  There is only sand and the sea.  I hope that by now you can picture your favorite place to look out at the ocean from.  This year, while watching my boys, I placed my chair right in the breaking surf.  I was struck by how loud the breaking waves surrounding me were.  The very same waves that look so relaxing from the resort can be downright scary when you sit right in them.    

Surrounded by the roar, I surprisingly found my August blog topic!  It reminded me of the market headlines we hear all day long. We spend a lot of time discussing volatility.  Volatility is more often associated with negative returns than positive returns, however you cannot have one without the other.  The sand on the beach would not exist if it were not for the constant pounding of the waves. It is striking how negative the daily market commentary can be.  The news outlets seem surprised when the market has good days.  With all those dark skies, where do individual investors find the silver lining?  [As if on cue – there is a massive lighting storm while I am writing this]

I will limit it to three items to be optimistic about to help drown out the noise -

• Cash – As of this month there is over $7 Trillion in US money market funds alone. And money markets are only one place to hold non correlated safe assets.  It is estimated that when all sources are added together there is close to $20 Trillion dollars sitting on the sidelines. 
• Conveniences- Our lives are more convenient than we often recognize. For example, did you know that you can search for photos on most smartphones by key words?  Give it a try.  From touchless sinks to back up cameras there are so many things we take for granted that have made life a little easier.  A luxury once enjoyed quickly becomes a necessity.  (I will avoid mentioning AI here as we hear enough about that.)
• Cushion-The Federal Reserve has room to maneuver if the economy requires it. When the economy slows down the fed can encourage borrowing and spending by lowering the interest rates.   Historically, this is not always the case. 
  
  

Part of our job is to pull you out of the noise of the rough seas and to remind you of the long-term perspective.  We would never suggest that you tune out the noise completely.  Instead, learn to enjoy some of the opportunities it creates.   Our team has worked to provide you with a portfolio that creates safety by utilizing not only Asset Allocation but also Asset Location.  Through a careful understanding of your personal situation, we often distribute your holdings across different savings vehicles to provide a more stable and predictable outcome across a large variety of environments.

We aim to provide you with market commentary that will not age poorly.  There is value in focusing on how we respond to the market; not only how the market is responding.  I strive to be like my boys, who will lie in the surf and just let the waves wash over them.  Pushing them safely back and forth and enjoying the motion of the ocean.  They know they are safe on the sand.  That is how we approach your financial plan: steady, intentional, and prepared for every tide.

 

 

So yes, the waves can be loud. Markets too. They rise and fall, as they always have and always will. But that motion, that noise, shapes the shoreline and carves the future. You cannot silence it. You must learn to roll with it.  The noise will always be there. But so will we.