Jeff Jaworski

Customer Service and Market Volatility

The recent market volatility has probably caught your attention and left you wondering, “What does Triune think about this?”

Let’s start with an analogy involving a recent family vacation. I inadvertently left my cell phone in my rental car as we returned it. We had been on the shuttle to LAX from the rental lot for less than 10 minutes when I realized it. I immediately borrowed my wife’s phone and called the rental company, hoping someone could help. After all, I had just left there and knew exactly where my phone was. I could identify the car, I knew where it was and could hopefully nip this in the bud with just a little help from the rental office.

To my frustration and dismay, I ended up getting terrible customer service. I remember thinking multiple times, “Why doesn’t anyone care as much as I do?” I knew I was the one who made the mistake, so I wasn’t blaming them. But in my efforts to correct the situation, all I wanted was to feel like someone there cared just a little bit. Getting no response from them did NOT make me feel very good.

So let’s connect the analogy to what’s going on today.

At Triune, we take the planning and management of your money very seriously. Our money, as well as that of our families, is invested in the same investments that we’ve recommended to you. We know from experience that volatility and endless media reports of how much worse it could get can leave you with lots of questions and worries about if we are doing the right thing. You simply want to know that we care as much as you do and that Triune is on top of it.

Short-term volatility is a natural part of long-term investment process. While it is no fun to wait through, it’s precisely the reason that stocks have outperformed other asset classes over long periods of time. We’ve based our approach on more than 100 years of collective experience, objective, Nobel Prize-winning academic research and experience in managing through multiple periods of volatility. So we know that, given the intentional approach we employed well before this week, reacting to the volatility is exactly the wrong thing to do.

Consider these interesting stats:

History of S&P 500* Declines 1928-2014

History of S&P 500* Declines 1928-2014

You’ve heard us quote him before, but it bears repeating. Warren Buffett said, “The market has a very efficient way of taking monies from the impatient investors and giving it to the patient ones.”

Know that we have carefully thought through your allocation in relation to your goals, objectives and time frames. While it doesn’t prevent short term declines in a portfolio, it does put the odds of long-term success in your favor.

Most importantly, we’re here to converse with you. We welcome your calls and want to talk through all the reasons why we think the path we are on together is still the best one, and still the path that is in YOUR best interest.

Triune Makes a Bold 2014 Prediction

Cash will be stable. High quality bonds with shorter maturities will be less volatile than stocks. And stocks (or more simply, ownership in the best run companies in the world) will once again be the most volatile.

OK, so it’s really not that bold after all, but that’s the GOOD NEWS! Indeed this is what we actually expect for the coming year and thus WHY we have positioned our clients’ portfolios in a manner that matches their short- and long-term goals and expectations. It’s also why we place NO CREDENCE in what all the so-called experts claim to be able to forecast for 2014.

In all seriousness, we’re barely one week into the New Year and I’ve already received 48emails from various financial publications and money managers with their guess/prediction for 2014 (Do that many people really get paid to guess for a living?). As you can imagine, they run the gamut from “a stalling economy” to “explosive economic growth”. The point is that this is the nature of investing in equities — in the short-run, it IS unpredictable.

If you’d like to see just how far-off some of these “experts” were in their predictions at this time last year, click on the picture below to read a short article. I’m reminded of a quote often attributed to Abe Lincoln or Mark Twain: “It is better to remain silent and be thought a fool than to open one’s mouth and remove all doubt.”

Jelly Beans and the Stock Market

At Triune’s recent Open House, we did a fun experiment. All of our visitors guessed how many jelly beans were in a jar. Enticed with a prize (Visa gift card) for the winner, they had motivation to make a good guess. You wouldn’t think it, but the results are actually analogous to the behavior of individual investors as compared to the stock market as a whole.

Here are the results of our Jelly Bean Experiment:

  • There were 53 total guesses submitted
  • The highest guess was 3,100
  • The lowest guess was 150
  • The average of all submitted guesses was 588
  • AND the actual number of Jelly Beans was 554
  • Our winner, incredibly, guessed 556!

Isn’t it interesting how remarkably close the “Average” guess of all 53 participants was to the “Actual” number? Click on this 3 minute video clip to see how similar this exercise is to where stocks are trading at today. Triune believes that, working together, we can harness this collective knowledge to put the power of the capital markets to work for you.