I did not grow up a Red Sox Fan. Being from Oklahoma, Johnny Bench country, I came to love the Sox only after moving to New England in 1988. My family has now become naturalized citizens of the “Nation”. A critical aspect of the game of baseball is to play all nine innings.
One of the most memorable instances of this was in the bottom of the ninth inning in game four of the 2004 American League Championship Series against the Yankees. The Sox were down 3-0 in the series and trailed in the game 4-3 with two outs. Mariano Rivera walked Kevin Millar and Dave Roberts was sent in to pinch run.
Everyone in Fenway Park along with the entire baseball world knew that the most important thing in the Red Sox 2004 season came down to having a man in scoring position. Financial planning is all about being in position and playing the full nine innings. History shows us that there have been 20 market corrections since 1928 or one every 2.8 years, this one would make 21. (Source, Bloomberg) Most of those corrections, according to Bloomberg were followed by new market highs.
At Axiom Advisors, we look at your situation with three things in mind.
1. How will we play all nine innings?
2. Can we put someone in position to score?
3. Are we playing good defense?
J. P. Morgan was attributed with the saying, “Bear Markets are when stocks are returned to their rightful owners.” Only the most naïve investor would put all their investments in stocks. None of our clients have done that. Likewise, virtually all investors should have some participation in equity markets. Virtually all of our clients do. For most, the reason they have the financial success is attributable to that fact.
Playing all nine innings in simple terms means positioning your wealth to last longer than you do. Putting someone in position to score would be the ability to capitalize on opportunities when they present themselves in a reasonable manner. Playing good defense means designing portfolios that match your needs, while eliminating unnecessary risks.
History was made when Dave Roberts stole second base. The game was tied and the Red Sox won the game in the bottom of the 12th inning, beginning their triumphant 4 game sweeps of the Yankees and Cardinals in their first World Series win since 1918. All this happened because they played all nine innings and more, and they took risks to put someone in scoring position. As Mr. Berra is famous for saying, “It ain’t over until it’s over.”
This market correction is not abnormal and will pass. It is not 2008 all over again. It is serious but not fatal. As always you are encouraged to call your advisor to discuss your concerns about your plan. Our commitment is to your financial success. Your commitment to us is never taken for granted.
We are also committed to excellence. We review the strategies and performances of our institutional and investment managers while looking for new talent and techniques. Much has changed in the investment world since I began my practice in October of 1989. What worked then is not the best approach today. What works today may need to change in the future. We want to play good offense, good defense and take advantage of opportunities. Most of all we want you to be in position to play all nine innings and come out on top.
David M. Wheat, CFS, ChFC is Senior Advisor, Axiom Advisors, LLC