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Facing Turbulence
Frank Armstrong

Market volatility is bound to make people nervous. There’s no question – it’s not fun. I know I’m surely not pretending to be having fun. But things must always be viewed from the right perspective.

When I was an airline pilot, back before 9/11 – feels like another life, now – pilots were free to get up and wander back in the cabin, talk to passengers, stretch our legs, and occasionally the airplane would hit a little turbulence. Many of the passengers would react with a white-knuckle death grip, saying “Oh my God! This thing’s going down.” Whereas, up in the cockpit, the guys were grabbing for their coffee because they didn’t want to spill it. They weren’t concerned in the slightest over the rough air.

The difference here was in the level of experience with environmental change. The pilots understood the airplane was built like a tank, so it was nothing to worry about for them. On the other hand, for the passengers, it wasn’t natural. But we all know, there’s nothing natural about being in a sealed tube more than five miles in the air, traveling at more than 500 miles an hour. Bouncing around only made it more apparent.

So, we’d try to keep people focused on the idea that this is not an unexpected turbulence. We didn’t know when it was going to happen, but we knew it was going to happen. And, the odds were that we’d muddle our way through it. It’s the same with our current market situation. The current climate is much more political than it is economic, and this extends to both foreign and domestic economies.

To reach your objectives, you’ve got to stay onboard. One good thing about the airplane was people couldn’t bail out, and our job as financial advisors is to keep people locked into where they are so they don’t make a mistake they may never be able to recover from. Too often in the past we’ve witnesses people bail out at market bottom and never recover from it. It was a disaster for them and their family. So, we need to keep our clients’ eyes to the horizon. We want to reach our destination together and we’ve done extensive research and put an incredible amount of work into crafting portfolios that immunize our clients against these short-term bounces.