I am visiting family in Alabama this week and enjoying daily hikes in the hilly woods near their home. Here among the red clay and pine trees, I am in my element. There is no place on Earth that I am not only from but of than central Alabama. I feel it when I arrive, as my blood pressure and pulse drop. The sun here doesn’t burn my sunscreen free skin (not an oversight I recommend), and the fresh, muddy waters of the lake have healing powers.
This morning, on my walk, I got rained on. I don’t mean sprinkled on, I mean drenched in huge raindrops from head to toe. I was about a mile from the house, on a part of the trail where I saw two deer a few days before, when the sound of raindrops hitting leaves began. At first, the forest canopy sheltered me from getting wet. The rustling of thousands of leaves hit by tiny raindrops was a beautiful sound. The rain grew more intense, and then, the bottom dropped out.
I looked around for shelter and briefly considered but dismissed seeking refuge on the porch of the small country church in the distance. Instead, I committed to following the trail back to the road and circle back to the house. As the rain soaked through my shirt, shorts, shoes, and socks I began to think how my current predicament related to investing. That’s right folks. I can separate myself physically from my work space, but I rarely get it out of my head.
Getting completely drenched in a rainstorm with no umbrella, no rain boots, and nowhere to shelter in the middle of the woods is a metaphor for investing in bear markets. The only way out of the rain was to push through it. This is true of long-term investors in bear markets. Since market timing creates two opportunities to be wrong – when to get out and when to get back in – the best course of action is to ride it out. This comes with the huge caveat that the investor has a carefully constructed financial plan and portfolio built to implement it.
When my socks began to squeak with water, I started to lose my patience with the rain. As my clothes soaked to the skin, I also became uncomfortably cold, a strange feeling during summer in Alabama. I played a mental game to keep my spirits up. I was only 10 minutes from the house, dry towels, and a change of clothes. Bear markets are harder. To make my situation equivalent to a bear market, there would be the added threat of lightning. Instead of shelter nearby, I may face spending the night alone in the woods, damp and exposed to the creatures and insects of the forest. Surely I could keep my head straight through a few minutes of discomfort.
Now fully soaked, I began to think about the importance of having a plan. How did I find myself more than a mile from home, with no umbrella, caught in the rain? A simple check of the radar would have alerted me to the possibility before I left the house. Even with all of the tools at our disposal, sometimes we need an objective, third-party to remind us to use them. This is the role of the financial advisor. When pain cannot be avoided, as is often the case in bear markets, an advisor helps us stay the course. The advisor coaches us through the pain and keeps us mentally in the game.
I leaned on my inner advisor to remember that few things on Earth make me feel more alive than standing out in the rain. For those last few hundred yards, I held my arms outstretched to welcome this feeling, this grounded connection to my body. As an introvert, I tend to live inside my head. Staying connected to the physical world is a necessary and constant struggle.
As I descended the final hill to the driveway, I was thankful that I had left both my iPhone and my baby at home. I cannot imagine getting through the ordeal with my five-month-old daughter strapped to my chest. I was also thankful that my dog, who hates the rain, trotted along beside me instead of sprinting for the cover of the porch. I took off my soaked sneakers and reached inside for a pair of towels to dry off myself and the dog. My disastrous hike and silly bear market analogies were finished.