Bob Dylan’s classic anthem, “The Times They Are A-Changin’,” released in 1964 seems as applicable today as it was 50-plus years ago. But the pace of change has been amplified. A 2015 report by McKinsey & Co. stated, “The pace of change is happening at 10x the speed of the first industrial revolution and the power is 300 times, which equals 3,000 times the impact of the second industrial revolution than the first one.” I think many people would agree.
It is estimated that every day, the average person in the United States is dealt some 54,000 words, 443 minutes of video and 285 articles with hundreds of links and thousands of images through a variety of mobile devices. Much of this input is currently focused on the 2016 U.S. presidential election. When not reporting on the raucous election, there are stories of a slowing economy, raging wars and migrant crisis. It is no wonder many of us are feeling a general sense of anxiety and stress. In many ways, these two powerful forces — the barrage of information and resulting feelings of stress — collide in the investment world. When I think about the lessons Waypoint has learned, I can identify a few keys to success.
KEYS TO SUCCESS
Key #1: Embrace the long view with grit and perseverance Angela Duckworth’s new book “Grit: The Power of Passion and Perseverance” is a good example. Duckworth defines grit as passion and perseverance for very long-term goals. “Grit is having stamina, sticking with your future day in and day out, not just for a week, a month, a quarter or a year – but for years.” She goes on to say “Grit is living life like it is a marathon, not a sprint.” The big takeaway from Duckworth’s studies and those of many others is to focus on long-term goals and not let short-term setbacks discourage you or cause you to lose focus on the bigger picture.
Key #2: Create space to contemplate Take time to reflect on, properly process and slowly absorb the onslaught of information we receive daily. Unless we step back and look at information rationally, we react with emotion, which is rarely effective – particularly when dealing with finances. Key #3: Passion for learning + new viewpoints I have found over the years that by combining a passion for learning with an effort to seek out as many different points of view as possible, I can better process information.
At Waypoint, this approach leads to a deeper understanding of the importance of our core investment principles. CORE INVESTMENT PRINCIPLES At Waypoint, core investment principles are the driving force behind every decision we make.
Those principles include:
• Understanding the sources of risk and return in every investment • The value of broad diversification
• The importance of liquidity and transparency
• Tax efficiency and the negative impact of high costs
Over the years we have incorporated new investment vehicles, dropped some managers and added others and adapted to changing markets — and there’s more to come. Our guideposts — as we sift through emails and voicemails, sit through countless manager presentations, listen to webinars, read a wide variety of publications, and attend conferences and study groups — are the enduring investment principles that have proven over the long haul to deliver the best possible results for our clients.