Soft Eyes
When you are riding your horse in a crowded competition warm up ring, you ride using soft eyes. This is a concept from professional trainer Sally Swift meaning that while you are focused on what you are doing, you are also aware of what is going on around you. In today’s chaotic environment, we should all be using soft eyes to move through the world. For example, during earnings season, we are very focused on the individual companies and their results and guidance, but we continue to follow the larger macroeconomic events.
While soft eyes can keep you out of trouble, sometimes trouble still inevitably comes your way. Young horses can be unpredictable, especially if they haven’t been off their own property before and can be frightened and excited. Horses and people both react instinctively when they are frightened, whether it be failing to listen to their riders, or selling their equities. In both instances, a deep breath is in order and usually everyone will be okay, although occasionally things escalate. Market sell offs are a common occurrence, with a correction of more than 10% occurring on average every 1.1 years since 1928, according to Ned Davis Research. A correction of more than 20% occurs once every 3 years on average. It is a good thing to train yourself for the inevitable turbulence.
While it is impossible to predict the day-to-day movements of the market in response to larger policy decisions, we can remain focused on achieving our long-term goals by continuing to choose the investments best suited for each client. Trimming into strength and buying into weakness is the strategy and process we have been implementing for the past forty plus years and has served clients well in the long run.
Source:
https://www.lpl.com/research/blog/navigating-the-storm-insights-on-current-market-volatility.html
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