When you are standing in the center of a teeter-totter, it’s best to keep your balance. Hopefully, you learned this as a kid while exploring the playground with your friends. Finding new ways to use playground equipment was essential to growing up as creativity exploded and out-of-the-box thinking started to appear.
More than likely, that risk-taking ingenuity grew up with you, and as an
adult, you have learned that staying centered and keeping a balance can
guide you through all sorts of grown-up situations.
As 2024 gets off to a roaring start, it's clear that volatility is going to be a big part of the investment landscape. With geopolitical tensions, uncertain economic conditions, and some earnings surprises, there will likely be some ups and downs.
It is a big change from the no-lose casino mentality that was the result of
Quantitative Easing. Ripples of volatility can soon turn into sizeable and
unpredictable waves - not the easy, same-sized kind you see at the wave park - more like the natural, wild, and sneaky waves you see on a windy and stormy day at the beach.
Suggested Playlist - Surfing Mix by Spotify
Time to wax the board and brush up on your childhood balance lessons -
Surf’s Up!
● Plan Ahead - Surfers study the weather, tides, and swell. When the
conditions are right, they get prepared with the proper gear and then
go for it. Investing requires the same attention to market conditions,
planning ahead for dips and swells, and the grit to participate in
unpredictable waters.
● Hang On - Surfers know how to ride a wave because they focus on
balance but also pay attention to momentum. Speed can save you
from wiping out, but so can a well-timed turn. When investing,
timing can be everything. Just when it seems like it's all crashing
down on you, instead of bailing out, a well-planned pivot can keep
you in the investment without losing it all. See VGA’s strategies here.
● Manage Your Risk - Knowing how much wave you can handle is
essential to survival when surfing. You don't dare take on a huge wave
if you wouldn't be able to get up from a big drop. The same goes for
investing. Knowing your timelines and goals can be the best way to
ensure survival from a dip or a crash. Many strategies can even help
you to recover quicker.
● Diversify - A good surfer is prepared for any type of wave. They will
have a solid supply of different types of boards - a quiver. Longboards
for small lazy waves and Guns for the biggest. This way, they are
prepared for whatever. Staying diversified in your investments is one
of the best ways to even out risk. Finding a mix of alternatives, ETFs,
and index funds is one way to have a portfolio that resembles a
well-stocked quiver of boards.
● Don’t be a kook - Never surf alone. If the goal is to ride some fun waves
and then return safely to the shore, surfers never ride solo. Find a
trusted manager to ride the volatility waves of the stock market with
you.
Vineyard Global Advisors offers 12 fee-only, actively managed, including hedged and long-only investment strategies via separately managed accounts - Learn More
Be like a surfer when you decide to invest - It takes skill, patience, and a
willingness to take risks to ride the big waves. Surfers know how to choose the right waves, keep their balance, and hold a diverse quiver. They also know when to hang loose and not panic, and are the ones who can ride a wave all the way to the shore.
