The headlines are filled with doom and gloom scenarios. While we are in the midst of a pandemic and historic economic uncertainty, we are bombarded with the most dire projections. There is no question the death of so many to this scary virus is something most of us have never experienced. I imagine it might be like being in a war torn area never knowing when a bomb is going to drop.
This time has caused me to think of my grandparents. My grandmother was born in Germany in 1896 and emigrated to Chicago with her parents when she was 3 years old. She had 8 younger siblings and grew up with a large extended family. She met my grandfather and they had 6 children; my late mother, born in 1925, was the first girl and 3rd in line. During my grandmother’s lifetime, she lived through WWI, the Spanish Flu, The Great Depression and WWII. She saw her sons go off to war and possibly her brothers as well. Prior to the Depression, my grandfather was a bond trader. He was investing money for many in her extended family and when the crash happened, they lost everything. One morning, my grandmother woke up to find my grandfather’s car keys and what money he had on the top of the dresser. He was gone and she was left with 5 young children to support. She got a job with the Social Security Administration and with the help of extended family and her oldest sons, 12 and 14 years, she somehow survived. A couple of years later, my grandfather got in touch with her and the family was reunited in Kansas City, Missouri. They had one more son. Their life was simple, and they were happy.
I tell this story because in my lifetime, I’ve never really been asked to give anything back to my country in any direct way. I was too young to really feel the effects of the Vietnam War, and it wasn’t an event that brought people together with one spirit to fight the enemy. COVID-19 is our new world war. It is a time when we are being asked universally to slow down the spread of an invisible enemy. I am doing my part by staying home, social distancing when in public and washing my hands. Is this hardship anything close to the many challenges lived by my grandparents and parents? Honestly, I have to say no.
Because of the Great Depression, there were many changes made to our banking and financial systems. If you study economics, the lessons learned from the Great Depression and also the Great Recession are serving us well today. In this circumstance with business shut down, the only entities that can provide any safety net are our governments: state, local and federal. The Federal Reserve, Treasury Department and Congress have all provided different pieces of the puzzle to help us weather this very difficult economic challenge. I don’t hold a cynical view of life largely because I know nothing is perfect. There will be no outcome that satisfies everyone. But without a doubt, we will survive and we will thrive in totally new ways. Our new normal will bring some exciting and empowering opportunities, and eventually people will go back to work and markets will rise again.
Certainty is an illusion; it always was. When things are going well, we convince ourselves that everything will always stay the same. Investing, like life, requires a certain amount of faith. Without faith that we will continue to grow and change in powerful ways, we are stuck. Inertia sets in and we lose tremendous opportunity to enhance our future. When the worst seems to have happened, that is the day to take a chance. That is the day to plug your nose and jump in, and you will find that you can swim. If you had invested in 2009, as many of my clients did, it was a scary time. Then our financial institutions were collapsing. Much wealth has been accumulated since then. Today, the cause of our crisis isn’t our institutions; it is something that seems beyond our control. Yet, we are controlling what we can with our social distancing and keeping some people employed. Will there be changes? Absolutely. Some of them we won’t like but we will adapt and some of them will make our lives better. They have yet to be revealed.
My grandparents learned a most important lesson. They thrived in their simplicity, focusing on family, gardening, cooking, reading, and conversations which revealed more than they would have ever known about one another. What would it take to bring a family back together after such abandonment? It took forgiveness and understanding of what they had gone through. They tempered their expectations and were grateful for what they had. Instead of looking at what was lost, they savored what they found. My parents went on to achieve professional and financial prosperity as have I. The sacrifice they all made paved the way for that success.
A wise investor doesn’t focus on what s/he lost, but rather what opportunities the future holds. My father used to say “You can’t call yourself an investor unless you lose money”. I think of him often as I recall his successes and failures throughout his investing life. No one bats 1000. Life brings challenges. The key to investing is buying good stuff and having faith that those companies will be around for many years to come. We make something so complicated that’s really so simple.