By Cam Goodwin | COO and Managing Partner
If you have ever risen before the sun to stand in waist deep water with the hope of spending your evening turning seasoned duck breasts on the grill, you know that a successful hunt requires solid planning and even more precise execution.
Much like investing, hunting is a calculated process that requires a comprehensive knowledge of the fundamental landscape, the target, and the ability to make informed decisions when the action starts to heat up.
When hunting, taking time to position yourself in a way that gives you the clearest shot is imperative for success. There are a lot of factors to consider, and skipping any one could trip you up. Same with investing. If you take into consideration factors of risk, short and long-term portfolio objectives, and proper asset allocation, you’ll be well prepared for whatever makes its way over the horizon.
Nature, much like the financial markets, often has its own agenda. There are days when all of the elements line up perfectly, and there are days when you just can’t seem to catch a break. During downturns, it’s important to keep in mind that if you’ve planned accordingly and exercise patience, the compounding effect of money will catch-up. It’s very rare — whether hunting or investing — that opportunities show themselves immediately. You have to commit your time to doing it right to recognize a positive outcome.
After you have planned, been patient, and started to accrue wealth, you will find that the opportunities start occurring with more regularity. Now is not the time to get overly excited and miss your target, just as its settling onto the water. Keep calm, tune out the distractions, focus on your investment strategy and coordinate with your advisor so you can act accordingly. Increased market activity might require an adjustment, but it does not constitute the need for firing randomly at investments that don’t sync with your plan.
Every good hunter chooses the precise tool for the right outing. A common metaphor is comparing the action of a shotgun versus that of a rifle. The truth is, you need both to build a portfolio that effectively provides a comprehensive investment approach. Step one is casting the wider net (the shotgun) to properly allocate and diversify your assets. Step two (the rifle) is to identify specific investments within your larger asset allocation that meet your specific needs and goals.
Planning, Patience, Poise and Precision: Whether hunting or investing for your future, these are critical elements that will directly impact your ability to be successful.