“Day after day I'm more confused
But I look for the light through the pourin' rain
You know, that's a game, that I hate to lose…”
Dobie Gray, Drift Away, 1973
Drift Away was a Dobie Gray hit the year I started as an Independent Financial Advisor in 1973. It’s in my head right now, “Give me the beat boys and free my soul…” To me, it’s still a great song. Some things never change. And that’s as true in music as it is when it comes to money.
Funny, it was that same year that - while the Dalai Lama made his first visit to the UK, women were finally admitted into the London Stock Exchange, and Pizza Hut opened its first UK restaurant in Islington - the stock market crashed (not my fault, by the way), rail workers and civil servants went on strike, and we had an oil crisis. Prices per barrel jumped up 65%...from $3 to $5. Those numbers sound laughable today, eh?
Yet unsurprisingly, by the time the market drama was over in January 1975, most investors’ nerves were shot to bits. Not even the Lama could have eased that tension.
And it was certainly an “interesting” time to launch any company, much less an investment business.
It’s equally so when I look back through the years at all the crises we’ve had to worry about. Who was it who said, “I’ve been through some terrible worries in my life, none of which actually happened”? Probably my mother. She even worried about having nothing to worry about. The Five O’clock News used to put her off her dinner. No wonder she “never scratched an auld heid,” as my Grannie McKay would say.
So, what’s the impetus for this hindsight glance? Well, at the moment I’m involved in creating a booklet to commemorate our 45 years in business, which has led me to read through decades worth of newspaper articles and other press commentary that I’ve tucked into dozens of red and black binders over the years.
By example, here’s what I wrote in The Scotsman during the summer fourteen years ago - probably when it was raining as it is today:
“I’ll let you into a secret about an interesting study prepared in the US looking at investing. Over a period of 20 years, a group of investors were followed, all of whom at the end of the term had more or less the same end result in investment returns.
“It was an exercise in investor stress. Investors who looked at their share values every day were unhappy 49% of the time, and happy 51%. Those who looked at their values on the first day of every month turned out to be happy eight times a year and unhappy four times. Those who forced themselves to look at their valuations on the first trading day in January each year were happy seventeen years out of twenty.
“Have a guess which group made the fewest investment mistakes and had less stress?” Things don’t change that much.
Fourteen years later, investors who avoid the temptation to check their portfolios and ‘do something quick’ since Covid19 played havoc with our nerves will, when they get to next January, probably wonder what all the fuss and stress was about.
As for their pals who reacted, well, they’ll likely be stressfully distancing.
Folks, you can either spend day after day listening to all the noise and getting more and more confused, or you can tune into something worth listening to – the sound of silence.
For me, I’m happy to let all that other stuff just drift away…
Oh, and if you liked what you’ve read here and you want to talk about it, feel free to give me a call.