Global View Investment Blog

In the Midst of the Storm

Being in the middle of the storm feels the worst. But is it even a storm? 

Whatever issues we may be facing today, it may feel like it is unbearable and overwhelming. However, the reality is seldom as bad as it feels. 

The “storm,” whether a hurricane, a thunderstorm, or a rain shower, can often feel like a Category 5. “This time is different,” we say.  But looking back, we realize that the worry and concerns mainly were amplified in our minds and emotions.

Think about the many things you have worried about over the last several decades. Exactly! I bet there are only a few things that initially come to mind. You made it through those situations, and here you are today. There were many more things that you have worried about. But you overcame them. You realized you were worrying about things you couldn’t control. And those things didn’t impact your long-term.

This is exactly how it is with investing. We set long-term goals, but there are many “events” until we reach those goals that make it feel like a Category IV Hurricane. We allow our fears and emotions to convince ourselves that “this time is different.”


Look Who’s Shouting about the Storm

Often, the people that are shouting the loudest about the storm really have no accountability regarding whether they are right or wrong. An investor may take action with their investments because of convincing information that they are receiving from some "credible" source. The problem is that even if the information is right, there is zero accountability with regard to the impact on your portfolio. The talking head will continue with the next story of the day, and the investor (you) will be left with the fallout and complications of what has happened in their investments.

From an investing standpoint, the Russian invasion of Ukraine is definitely creating uncertainty in the markets. However, we must take a step back and remember that most of our goals are long term and most investment portfolios have a long-term strategy. I’m not discounting the seriousness of the Russian Ukraine invasion. This is a tragedy, and breaks my heart to see family’s lives turned upside down and people dying. But even though this time is different as it always is, the market reactions are often the same. 



I want to illustrate what it looks like when we are in the midst of the storm and the importance of why we must keep our focus on the long-term strategy. This is a portfolio that is positioned as 50% Defensive and 50% Growth. The diagram below shows periods when the portfolio was falling, recovering, and rising. 

When viewing the portfolio monthly, you would have seen it going down 32% of the time and going up 68% of the time. Stating that slightly differently, it will likely be negative 1/3 of the time if you look at your portfolio each month. 

Can you imagine how much more anxiety you may have if you look at the portfolio daily?  But when you only view it once a year, you will see it rising 86% of the time. You’re probably thinking, “Ok, I can handle that.”




This is how people hurt themselves financially. Let me explain. This is looking at the portfolio returns over the last 50 years, with an average 10-year return of 9.5%. 

In a 1-year period, you could expect it to be between -22% and + 41%. That seems like a lot of volatility, especially when you are in the middle of it. When you are on the bottom side of that range, it is hard to remember that volatility happens. So, when you look at the 10-year numbers, the range looks much better, as low as 2.5% and high of 16% per year. Abandoning the strategy through the multiple 1-year scenarios often prevents investors from reaching the attractive and needed 10-year returns.

In other words, the short-term appears scary and uncertain at times. But we must keep our focus on the Long-Term. Sometimes there are reasons to make tactical allocation changes, as we have in our portfolios. The Long-Term strategy hasn’t changed.

Whatever you are worried about in your life today, you will likely look back in 10 years and realize how small of an issue it really was. Do not let today’s worries overshadow your long-term goals. 


Joe E. Hines, Jr. CFP

Retirement Transition Specialist



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Joe Hines

Written by Joe Hines

Joey's primary focus is working with clients in the goals setting and financial planning process. He has extensive experience is in helping clients facilitate the decision making process, leading them through the implementation of their financial plan and contributing to their peace of mind. This includes helping clients gain an understanding of estate planning, charitable giving, and helping them implement these plans by working closely with estate planning attorneys.

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