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May 31, 2022

What the Queen can teach us

Platinum Jubilee

No one ever said investing wasn’t tough.

Even as the threat of the pandemic begins to subside, the war in Ukraine and an escalating cost-of-living crisis are adding fuel to the fire.

It’s enough to test the most patient of investors.

Especially when it often seems as if there might be more exciting alternatives.

But that doesn’t mean you generate wealth over a longer period.

It just needs a different set of emotions.

Not so much excitement, or the search for instant gratification, but determination, patience and stoicism.

Something we can’t help notice the Queen, who this week celebrates her Platinum Jubilee, personifies only too well.

Monarchists and Republicans alike can’t help but recognise her achievement

The Queen has become such an institution that it’s easy to take her for granted.

But let’s pause to consider what her reign has taken in. It includes the moon landing in 1969, the first email being sent in 1971, the fall of the Berlin Wall in 1989, and the 9/11 terrorist attacks in 2001.

She’s weathered her fair share of personal upset too – from her ‘annus horribilis’ in 1992, and the death of Princess Diana in 1997 to, most recently, the disunity in her family and the sadness around the death of her husband of 73 years.

She’s also presided over 14 Prime Ministers.

What’s her secret?

She comes from the generation who lived through the Second World War, for whom stoicism and determination are watchwords.

In a speech on her 21st birthday, April 21, 1947, she promised: “I declare before you all that my whole life, whether it be long or short, shall be devoted to your service and the service of our great imperial family to which we all belong.”

And she’d never deviated from the plan (although surely in 70 years she must have been tempted!). She has simply and studiously done her job.

Although, as an investor, it may sometimes feel challenging – even boring – to have to be so rigorously calm, focused and self-possessed, strong and determined does win the race in the end.

So how do we do we do the same?

It’s all about managing our emotions.

American economist Paul Samuelson famously said that “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”

It’s about resisting the temptation to ‘mix things up’ to deviate from what’s there and test a few alternatives.

It’s also about resisting the urge to panic, to hit the ‘sell’ button when the markets drop.

But’s that’s easier said than done…

Looking back to go forward

The Queen’s first Prime Minister, Winston Churchill was once quote as saying: “The longer you can look back, the farther you can look forward.”

This is certainly helping when we think of the investment cycle.

At Sutherland Independent, we often refer to the graph below to show investors that despite several historic market crashes, from the Vietnam War to the global financial crisis, stock markets ultimately adapt and move on.

Historic markets

Past performance is of course no guarantee to future returns, and investment values can go down as well as up.

However, with a long-term approach, where you take good advice, stick to your guns, refuse to be panicked, and hold don’t sell, history shows that you’ll be rewarded.

In the same way, you can build tremendous amounts of wealth by building a steady course.

It might not feel that you’re making any progress at all at the time, and you may get frustrated with the terrain, question the route, and wonder if it’s going to be worth it.

But it’s when you look back that you can really see the difference.

Whether it’s 2 hours, 5 years or a 70-year long reign, it’s often perspective that gives us the most comfort.

Something to bear in mind while we’re wrestling with the present.

In the meantime, we would like to wish you a happy and glorious Jubilee weekend, whatever you plan to do with the public holiday!

 

May 31, 2022