“If there are no dogs in heaven, then when I die I want to go where they went..."
Puppy Investing
April 13, 2024
In the world of investment management, patience is not just a virtue – it's a prerequisite for success. As a portfolio manager I have always prided myself on my ability to be patient and have applied that trait to almost everything I do. That is until a furry tornado named Riley swept into my life and challenged that patience.
I used to swear by the aloof charm of cats. My whole life has been spent in the company of at least one furry feline – if not more. Dogs, on the other hand, have not had a presence. I have always liked dogs – other people’s dogs that is.
Well, that changed late last year. My wife has dutifully followed the Ann Arbor Humane Society’s online “Puppy Page” for some time, frequently showing me pictures of little fur balls waiting to be adopted. I did my best to acknowledge their cuteness while ignoring her not-so-subtle pleas to take one home. This worked until a certain black lab puppy came across her screen. I don’t know if it was just a matter of giving in, or the cliched “sad puppy eyes,” but before I knew it, we were Riley’s puppy parents.
Riley proved to be a spirited companion whose antics often mirrored the unpredictability of the market. Just as new investors embark on their financial journey with excitement and trepidation, we found ourselves navigating the challenges of housebreaking accidents and chewing escapades.
The initial euphoria of bringing Riley home echoed the anticipation of entering the investment arena. Like our clients envision a future of financial security, we dreamt of tail-wagging adventures ahead. However, as any seasoned investor knows, the path to success is not without obstacles. Like when your puppy chews up an entire bottle of Vitamin D - thankfully, she was fine.
Training Riley proved to be a lesson in discipline and consistency, much like the steady commitment required for successful investing. From researching investment strategies to weathering market fluctuations, the parallels became increasingly evident. Just as Riley will learn to sit and stay through repetition and reinforcement, investors learn the importance of staying the course despite market volatility.
Anyone who has ever owned a puppy knows the depth of emotional attachment that develops over time. In Riley’s case, it was just a matter of days until she fully ingratiated herself into our family. Your pup becomes an integral part of your life, bringing joy, companionship, and occasional challenges. Again, similarities exist with an investment journey. You develop a certain connection with your portfolio. You celebrate gains in the market, worry over minor setbacks, and feel a sense of pride as you witness your investments grow.
The challenges of having a puppy in the house are numerous. While Riley is a pretty good dog, she has had her share of setbacks, including: accidents, escaping from her leash, jumping on strangers, chasing the cats, the Vitamin D incident - OK maybe even more than her share. It is important, though, to remember that challenges should be expected. You might not know what exactly they will be, but you know that they will come. Likewise, investing presents its own set of challenges. Market downturns, economic recessions, and unforeseen events will test your resolve.
Yet, just as you persevere through puppy training challenges, staying the course during market downturns is essential for long-term financial success. Of course, having the proper investment solutions in place helps too. Those who rely on the “buy and hold” philosophy will be severely tested when the market plummets 20 or 30%, while others, in actively managed strategies, may have an easier time if their portfolios only dip a fraction of that amount. A well-trained dog, like a well-positioned portfolio, is much easier to live with - and provides fewer sleepless nights.
As Riley grows out of her puppyhood, I have adapted to her changing needs and behaviors. Luckily, most of the changes have been positive. Riley is getting along with her feline housemates, she sleeps later, barks less, and has been accident-free for months. All positive developments, to be sure.
Again, it is not all rosy, as she has begun chewing shoes and begging for table scraps. It’s all about being flexible as a pet owner and adapting to current conditions. These same characteristics are vital for successful investing. You need to reassess your financial goals periodically and adjust for any significant changes in your circumstances.
The “investment” in a puppy pays off in the form of unwavering companionship and years of adventures. Likewise, the commitment to investing yields long-term rewards – albeit of a different sort. Over time, compounding returns work their magic, exponentially growing your wealth. Whether it's funding your children's education, purchasing a home, or enjoying a comfortable retirement, successful investing provides the means to achieve your goals.
Perhaps it’s acquiring Riley that led me to see investing through a puppy lens, but I am convinced of the parallels. Both are journeys filled with excitement, challenges, and rewards - and both demand dedication, patience, and a willingness to embrace (and plan for) the unexpected. By recognizing the connection between investing and pet ownership, you can approach your finances with a new-found perspective. So, whether you're training your puppy to sit or navigating the complexities of the stock market, remember that with the proper commitment and patience, the rewards are boundless. Also, be sure to keep those vita-mins out of reach.
The article above is an excerpt from the Q3 Quarterly Market Commentary. Here is a link to the most recent issue. Complete the form below if you would like to get this emailed to you each quarter.