How Confident Should You Be In The Age Of Unpredictability?
CIO Investment Perspectives: Q3, 2020
Chief Investment Officer, Founder
Daniel Barnes is the Chief Investment Officer for Strait & Sound. His mission is to frame and craft each client’s exposure to risk in accordance and alignment with their long-term financial goals. In this way, Daniel is instrumental in helping clients achieve complete financial independence.
You’ll often hear the people of Strait & Sound make this statement: we cannot predict the future. We say this because it’s true. But we also say it as a reminder to ourselves that the future is unwritten. So we need to be very careful about the promises we make to our clients and even our own families. At Strait & Sound, we don’t just offer advice and financial strategies to clients. We walk-our-talk by structuring our financial lives according to the same principles we recommend to clients. I guess you could say – we are in this together.
So this raises an important question. How confident can any of us be right now in a future that seems so unpredictable? Why do I say this? As I write this in early September of 2020, we are facing:
- The continued ravages of COVID-19, which has killed 200,000+ Americans and continues to be the single biggest health crisis of a generation.
- National and local elections with candidates who couldn’t be further apart on important issues that could have immediate and long-term financial consequences for all of us.
- Wildfires up and down the US West Coast that threaten properties, lives and the health of people breathing bad air.
- Sometimes violent protests calling for racial justice and a new way of envisioning how law enforcement can promote domestic tranquility.
- Jobless claims which are reminiscent of the great depression.
- Whispers from several corners, some credible and some not so credible, of a much longer and hard-fought-for economic recovery than we’ve imagined, which may be preceded by some sort of stock-market crash.
If you look at the list above and find it daunting, you’re not alone. I share that same concern. One of the things we hope you’ll come to admire about the Strait and Sound team is that we don’t pull punches. We call them like we see them. Here is the truth as I see it. The near-term economic future could be very challenging indeed. But then again, things could be just fine. The future is unwritten.
What Is The Shape Of Recovery?
One of the most challenging parts of the situation we all face right now is understanding that which is certain versus that which is uncertain. Here is what I mean. While I cannot predict with any degree of certainty what the future might look like, there are still certainties which I can predict. For instance, I can predict that:
- Tuesday will follow Monday.
- Night will follow day.
- The government will continue to tax ordinary citizens.
- We will all need a place to eat and sleep, which cost money. Our mutual need for income will not go away.
- COVID-19 will end. No pandemic in human history has lasted interminably and this one will not either. I cannot predict when it will end, but I’m confident that it will end.
- Economic incentive and the creativity fostered by the downturn will drive innovative people and companies to discover and develop solutions to today’s challenges.
- Those who take no risk will have no part in solutions for a better future and they will not participate in the financial gains of tomorrow’s solutions either.
I cannot tell you what the solutions will look like, which companies will put them forward, who will lead this recovery or how long it will take. But I feel absolutely confident in saying that a recovery WILL take place and the foundations for a brighter future are being laid today.