Scary Markets and Scary Oceans

This week I'm down in the Outer Banks on our annual family trip. As a set of barrier islands, the Outer Banks are known for some scary waves at times. And almost glass-like gentle waves at other times.

The past few weeks we've seen the return of scary markets in our investments as well. I'm not going to include long-term statistics of volatility, averages, duration or other data right now - because while they all have their place, sometimes they're not very helpful in the moment.

Scary stock markets can sometimes be like scary oceans. We don't really know the size of each wave. Sometimes the waves can be really powerful. Sometimes they knock us off our feet. Sometimes they catch us by surprise. 

One day the ocean is calm, the next it looks ready to eat us alive. 

As I'm teaching my own kids about playing in the ocean, I offer them some tips. 

Dive under the big ones. 
Float over other ones. 
Face the ocean, not the beach. 
Keep an eye on the current set of three waves. 

And despite all this, they sometimes get scared (and I do too!). But the worst thing we can do is panic in the middle of it. 

I don't know when the recent scary market will end, as much as I don't know what the waves will be like at the time you read this letter. But I do know that scary things can be just that - scary. And that's ok, as long as we don't panic.
Additional Resources
This is intentionally brief this week, so my only other resource is a post now up on Calibrating Capital. 

1. Calibrating Capital - Defining the Why of Investing Before the How or What
After another conversation with a fellow industry professional on the merits of financial planning, I felt compelled to recycle some content on the importance of defining the WHY of an investment, before choosing the HOW or WHAT of an investment. As Simon Sinek says, we all need to start with Why. In the context of investing, the WHY is defining the goal of an investment.

Traditional finance advice goes something like this:
What > How > Why

Real financial advice
Why > How > What
Quick note expressing my gratitude for each of you. I was sharing some of my statistics of this weekly letter with a friend, who was awestruck. The open rate, the dialogues, the replies. I'm grateful for each of you, and the few moments you grant me each week reading these letters. 

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