From the desk of Peter Blatt
In 2008, I went through a large financial setback. I pulled my clients out of the stock market, and revenue slowed down considerably for my firm. Nobody wanted to invest, make decisions, or pay for legal services. I had 8 employees (which included independent contractors). I continued to pay for salaries, overhead, etc. I spent several hundreds of thousands of dollars to keep my office afloat.
In the middle of 2010 I let go most of my employees and contractors, going down to 3 employees in the office. I was hopeful that things were going to turn around, and keeping my staff for as long as I did, was probably not the best business decision. As an aside, we are now back to 5 employees and running a very smooth, lean ship.
Where am I now? I find that I am mindful of the past, but live in the present. This mindset is counter to the exuberance of the stock market. The market trades on pure emotion, fear and greed.
If the market has a setback – which it has over 3 times in the last 20 years, it will recover. The market does not judge or even remember the losses. It only adjusts for the trades. How come we blame ourselves and can’t move on from our pasts. The answer is simple; we are human and shade everything with our past experiences.
Recently, I was interviewed on financial planning and mindfulness. It was by a reporter who has written for FOX news and Yahoo Finance. She asked me a series of questions on how mindfulness has helped my clients become more successful. We discussed (without disclosing any confidential information) my clients that have the most success financially are mindful. They are tightly focused on the here and now and don’t dwell on the past. Their interaction on the future is only in the form of planning for what they can change now in order to have a potential better result in the future. Being in the moment can be difficult stuff if you have regret. The markets have taught us to forgive the past transgressions (yes they are up again for now) and to only focus on current values. They also taught us strong investment lessons such as: you can not be invested in solely one asset or asset class (e.g., real estate), or allocated with high costs (high priced mutual funds). The markets taught us to plan for a rough ride ahead (as one experienced in the past) but not to worry as long as you plan properly. In life there will be bumps in the road (same as bumps in the market) but with the proper planning, the bumps can be minimized. We can’t change our past losses, but we can be mindful of repeating the same types of mistakes. The market has no memory, but we do. Choose to us it.
Until next time,
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