Last week we welcomed the spring season and, with it, the promise of warmer weather, new birth, renewal, and the repainting of nature’s landscape. Growing up on a family farm always marked the beginning of planting season with the rise of soil temperatures, longer working days, and the rapidly increasing pollen count all unifying to nurture a more suitable growing environment. With all of the aforementioned signs intact, my son and I planted our garden today; a welcomed respite from the otherwise solitary repetition of our current world order.
While tilling the soil I was reminded of my childhood and the faith-filled discipline my great-grandfather, grandfather, and father all exercised as they planted the fields cursed since the days of Eden. It was easy to make the investment required to prepare the fields and fill the planters with seed when the commodity prices were high and the previous year left the coffers full. The difficulty lies in the dry winters with higher than normal temperatures evaporating the hope that fills every farmer’s mind. But plant seeds they must if they expect to have a crop to harvest and take to market by the fall. So they plant and pray and wait…for rain, for prices to rise, and for seeds to sprout.
Investing toward a future as defined by your financial life plan is very similar. It is easy to make the sacrifice and repeat the actions you are called to make to achieve the outcomes you desire when the markets are in your favor and the past years provided easy profit. But what about maintaining the discipline when the markets turn on you and the future looks threatening at best. The conviction required for such action is similar to what I referenced in our last post stating, “We lead by conviction that we gird ourselves with on a daily basis allowing us to do what we believe is right and at the same time expose ourselves to the possibility of being wrong.” During times like this planting financial seeds can be intimidating enough to cause paralysis, but our clients engage our team to take actions moving them ever-forward to their life’s goals.
To that end, we took massive action this week after our weekly investment committee meeting on Monday morning. It is our unified and unanimous determination that the greatest risk to our client’s long-term target return lies in the credit or debt markets and not in the equity markets. We also see rare opportunities in equities that require individual stock selection and not a blind, index approach or a blanket asset allocation model where very little action is actually taken. As a result, we moved out of fixed income and into cash, building an arsenal of dry powder to deploy into particularly depressed stocks with rifle-like precision. We continue our commitment to our managed strategic equity models that have long proven themselves in all sorts of markets, but we are now accentuating with a tactical sleeve of more targeted positions to represent 15-20% of our clients’ overall portfolios.
When we are trusted with the future of our clients financial life plan we understand that we are counted on to help them make decisions they may not make by themselves. By granting our team discretion, we are empowered by those clients to act on our convictions and plant seeds with a faithful discipline that may be contrary to popular sentiment. After all, it is planting season!