Should we panic during market turmoil?

Since my retirement from practicing medicine at the end of June, you may have noticed that the stock, bond and foreign exchange (FX) markets have been tumultuous, to say the least.

As both my clients and personal friends I hope that you are not surprised to learn that short-term market turbulence, caused by each new worry of the day, does not concern me in the least… Nor should you be worried.

The first reason is actually biblical. Jesus Himself said in the book of Matthew: “And which of you by being anxious can add a single hour to his span of life?” and “Therefore do not be anxious about tomorrow, for tomorrow will be anxious for itself. Sufficient for the day is its own trouble” (ch. 6, vv. 27, 34). These verses are fairly self-explanatory.

The second is that there is ALWAYS something to be worried about in this world, and the media ensures that we are aware of it. Off of the top of my head, here are some recent concerns we have all read about or watched on TV: China’s currency “manipulation,” currency wars, political tensions with China and the Middle East, terrorism, an impending Greece debt default, Greece leaving the Eurozone, Greece staying in the Eurozone, falling oil prices, an impending global recession, the “looming” stock market crash, etc.

At Vailshire, while we watch these developments with interest, we do not base our long-term investment decisions upon them.

Rather, we firmly believe that great companies will eventually achieve excellent long-term investment returns for their shareholders–simply because they must.

This is not some esoteric investment philosophy but, rather, it is evidence-based fact.

So, in conclusion, I implore you as your humble investment advisor as well as your friend, to not be concerned by near-term market fluctuations and short-term dips in your portfolio balance statements. At Vailshire, we are in it together for the long-haul and our portfolios are flush with fantastic companies that are simply compelled to deliver market-beating returns over the ensuing years and decades.

Living well and investing wisely with you,

Jeff Ross, M.D.