On the Water

Have you ever been on a canoe trip?

Photo: Olivier Labbe. Source: Pixabay

The experience is singular. Each day is unique, but along the way they merge into one another. You lose our modern sense of time and develop a daily rhythm: dawn, morning fog, daylight, evening. Sometimes the scenery opens up, and you get views of the hills and landmarks around, but more often your vision is confined by the banks and the shore. You get to know your paddling partner’s habits and stroke patterns pretty well.

After a few hours on a turning, twisting river, it’s easy to become disoriented, especially when it’s cloudy. You may think you’re still headed south, but your guide insists that the direction has changed, and your campsite is still several hours downstream. This matters, because you might not have time to dawdle over lunch today, depending on how early you got going this morning.

It‘s hard to tell which direction the river is flowing when you’re down on the water, navigating the riffles and shoals right in front of you. If you had the perspective (and eyesight) of that hawk circling overhead, you could see the bigger picture: how much progress you made, where the watercourse starts to narrow and speed up, how much carrying the portage ahead requires.

Photo: Bill Raften. Source: Pixnio

Seen from above, though, the general direction is clear. Despite the twists and turns along the way, a river follows the course of least resistance: higher elevations to lower, eventually opening out to the sea.

It’s like this with markets. They make their twists and turns, and when we’re navigating the current riffles or rapids it’s easy to be caught up in the moment. In fact, it’s good to focus on what’s happening now, to avoid getting overturned or hung up on a projection. But the larger direction doesn’t change just because things get a little rough. The most critical part of investing happens before you allocate a penny, in the planning: what you want your money to do, how much volatility you can handle, what limitations you face: legal, financial, personal, psychological. Planning our finances – like planning a canoe trip – doesn’t happen by itself.

In The Wind in the Willows, Kenneth Graham says there is nothing half so much worth doing as messing about in boats. Because if you know the river, the current eventually takes you where you need to go.

Douglas R. Tengdin, CFA

Charter Trust Company

“The Best Trust Company in New England”

By |2018-11-13T07:41:29-04:00November 13th, 2018|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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