First, do no harm

Donald G. Bennyhoff, CFA |

On my computer monitor, I have taped a small piece of paper with the words primum non nocere. It’s Latin—a “dead” language that pervades modern life—for “first, do no harm.” The underpinnings of the Hippocratic oath, this phrase is as applicable to providing investment advice as it is to medical care. When the headlines and talking heads scream “Do something!” our first reaction should be more measured: First, do no harm.

Volatility has returned to most areas of the financial markets throughout 2020 for a variety of reasons – the U.S. election and the global pandemic being the most obvious. However, there are other factors that fall under the general heading of “uncertainty.” I find it interesting how many people have been alarmed by this, rather than seeing uncertainty for what it is: more normal than not. I use the word alarmed both descriptively and sympathetically—descriptively to characterize people’s behavior, and sympathetically because I know it’s easy for people to get emotional about their investment portfolios. After all, these investments represent many important things in people’s lives: college tuitions, weddings, new homes, retirements, and charitable bequests to name a few.

Sometimes the best thing to do is to do nothing

During volatile times, the temptation to do something can be very strong. Sometimes headlines are dire—economic challenges or global strife—and our very human fight-or-flight reflex begins to overwhelm. A longer-term perspective can help. Figure 1 below (U.S. recessions shaded) shows that the stock market's history has been punctuated by a fair number of crises. Yet here we are, at all-time market highs.

Figure 1.



So, are dire news headlines what should matter the most and drive your actions as you try to achieve your long-term goals? No, the headlines you should pay attention to are the headlines of your lives, not those in the news. This can mean doing nothing (and that’s ok) in response to news of the day presented minute by minute, device by device, by the financial and other media outlets.

Focus on you

Personal headlines are at the heart of a financial plan, which can be an invaluable tool to help you through unsettling periods in the markets. Personal headlines describe your specific goals and objectives, those goals or events in life that you said were most important to you. Essentially, they are your guideposts for measuring “success.” Portfolios should change over time, but only in response to the headlines in your life. The birth of a child or desire to retire early, rather than the market’s daily headlines, may represent prudent examples in your life to do something related to your investment portfolio and its impact on your long-term goals.

How we help

Too often “staying the course” is interpreted as “doing nothing.” This is a shame, because staying the course can result in something very powerful: Having a plan and sticking with it, unless your headlines change. Market headlines have never been incorporated into any financial plans I’ve seen, nor should they be, as they rarely have much to do with our clients’ headlines. Client headlines are the ones that matter the most. Helping you understand that ignoring all the market noise doesn’t mean putting one’s head in the sand, can be prudent, and isn’t being ignorant, are key ways that Portfolio Solutions® can add value to the financial lives of our clients: First, do no harm.


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