Turbulence and Investing in Evergreen
Finally! It's time for summer vacation and you're boarding
your plane. You've been told Paris is great this time of year and you've
never been. One more check on your bucket list. The lines for
security weren't terrible and while there was a bit of waiting you got through
in plenty of time. You've got all your essentials with you: a good book,
noise-cancelling head phones, a window seat and a decent neighbor to your
right. The captain asks the flight attendants to take their seats and
soon you're speeding down the runway and taking off. Everything is going
smoothly and the plane is climbing to 10,000 feet...you pull out your bookmark
and start the next chapter...20,000 feet...you're so glad you brought this book;
it's really getting juicy...finally the plane levels off at 35,000 feet.
You're relaxed and really getting into your story. So far, this trip has
been painless and you are already craving the fromage and the crepes. You
already have the perfect Eiffel Tower selfie planned out.
Suddenly and without warning, your stomach is in your throat
as it feels like the plane has just dropped one hundred feet! What was
that?! An announcement from the captain warns of heavy turbulence for the
next ten to twenty minutes. If that's all you have to deal with, not bad,
you tell yourself. I can get through twenty minutes of turbulence on a
nine-hour flight. But it is bad. The next bump is so severe that
now you've actually bounced up out of your seat. Drinks are spilling
around you and your book is somewhere under someone's seat now. The bumps
are hard. They keep coming. You've flown quite a bit but this is a
new, terrifying experience. You were not prepared for this. More
bumps and a few people let out screams. You're holding on to your arm
rests tight now. You're sweating. The lights go out.
What do you do?
If this plane's going down you might as well jump out now
and get it over with...right? Would you really pry the door open and jump
out to end this miserable experience?
When the stock market transitions from good times and smooth
inclines to volatility and relatively big drops in short periods of time do you
sell and get out?
If you're too scared of the turbulence to ride it out, there
are no selfies, fromage, crepes or trips to the Louvre in your future. If the
natural volatility of the stock market is too much to stomach, remeasure your
risk tolerance and be sure you have the right mix of asset classes for you and
your goal's timeline. If you don't and the dips are too much to handle, you
could be affecting and missing out on the important intention you set out to
see through when you got into investing in Evergreen in the first place.
You wouldn't jump out of that plane...don't abandon your
strategy, your objectives, nor your Brie.
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