Know your Knots

My childhood days were spent golfing, working, and riding in a boat while my dad fished in the open ocean. My dad was (and still is) big on safety and preparedness.

Truth be told, I had more fun eating snacks while we waited for a bite, however the one thing that I did catch hold of was the importance of being prepared and subsequently, I learned the skill of fastening a “fisherman’s knot”.

The safety guides at RMI mountain climbing expeditions state that rope skills are a vital component of a preparedness plan when attempting a mountain climbing expedition. When summiting a mountain, training and a preparedness plan facilitate the climber in making sound decisions that can improve their chances of reaching the summit while maintaining the necessary margin of safety.

Navigating challenging financial markets can be equated to the mentally challenging aspect of mountain climbing.

While climbers may face challenges such as extreme weather, unstable terrain, and exposed ridges, investors can encounter market volatility, declining asset prices and liquidity risks just to name a few.

Although Equity Markets have performed favorably as of late, it is probable that disruptions may occur. This is the time that Investors should be thinking prudently and ensuring their ‘Investor preparedness plan” is in place for the time when fluctuations can and will happen.

I have experienced several market fluctuation cycles over my 29 plus years as both an Investor and as a Financial Advisor and these are 3 essential mindsets to have in your plan to successfully navigate scaling the mountain of investing.

1. Identify your Assets and Liabilities and understand the implications should asset prices meaningfully decline.

2. Maintain robust cash flow measures designed to help minimize potential disruptions amid adverse economic and market conditions.

3. Initiate building liquidity while thinking opportunistically. Create the ability to put your money to work should asset prices decline.

As my clients trusted financial advisor, I assist investors in understanding and addressing potential and probable issues which helps them to better position themselves to help achieve their financial goals and strive to build stable returns amidst economic turbulence… and I can tie a mean fisherman’s knot too.

Any opinions are those of Taylor Easley and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation.