Making the Hard Choice Between Pain and Persistence
Alone on the enormous beach, it was as if we had discovered a secret paradise. The crystal clear water barely had a ripple, the sun was hot with the perfect cool breeze, and we took a collective deep breath as we looked out on the deep blue expanse in front of us.
“Come on! Let’s go!” shouted one friend to the next.
Someone grabbed a ball for skimming and playing.
The girls carved out their own space to catch up after a long absence.
Everyone was smiling and laughing.
“What was that?”
“Something got me!”
One by one.
“It got my chest!”
One by one they got out of the water to admire the welts left by the stingers; the small jellyfish that were impossible to see until it was too late.
Tears dried and we moved on to sandcastles and relaxing. Soon, there was a game of cricket going too. After a while, hot and happy, we turned back to the water.
“Come on, it will be fine,” said our friend to the children.
“Let’s go,” said the friends to each other only this time slightly wary that paradise wasn’t exactly perfect.
My son decided to wait it out with me on the shore. Too afraid to go back in he told them he needed a drink for a minute. He’d be there soon… even though I knew he wouldn’t.
The girls decided they could catch on the beach as easily as in the water. “We’ll go in later,” they shouted in unison.
Five brave people unwilling to give up on the fun thanks to a little pain waded back into the water.
I closed my eyes, relaxed, and then the shouting began.
“Take off your shorts, mate! Get them off!”
A stinger had floated into the youngest child’s bathing suit and was having a party on his skin.
Soon after, we all left the beach and made our way back to the house.
The next day, we woke up to clear skies and the ocean inviting us to return.
My son said, “Let’s do something else. Out of the water.”
My daughter said, “We can’t avoid the water forever. We’re here for the beach. Why let one sting stop us?”
At work, I’ll bet you’ve waded into situations that looked like they’d be ideal and felt the shocking sting of the unexpected. I know I have.
You have three choices…
1) Get out of the water… or the project or company or team.
2) Persist… there aren’t stingers everywhere.
3) Stay on the shore… begin to play on the edges and let others go in deep.
Who are you?
When you get stung, are you so afraid to go back into the water that you’re willing to give up all of the other parts that are amazing?
When you see other people get stung, do you get out before it happens to you?
When you know that what could happen isn’t guaranteed to happen, do you give it another go because it’s worth it, or do you let your fear lead the way?
How many times are you willing to feel the sting before moving on? Once, twice, ten times?
How do you decide when something’s worth it?
How do you know that things haven’t changed and the danger that you’re dreading is no longer present until you get in and start to swim again?
Will you watch others doing what you wish you could do?
Today we’re taking a break from the beach, but I know we’re going back tomorrow. Looking at the water, feeling the call and instead diving into our fear teaches our children that fear wins. I’m not suggesting that we go in ten days in a row and get stung day after day but one day, one try, one dip, does not tell enough of a story.
Life is full of unknowns and danger at every turn. To live your best, fullest and most fulfilling life, you can’t worry about when and where the next sting will come. Incredible things are available to you when you go all-in not without fear, but despite it.
Do Valuations Matter?
Written by: David Lebovitz
The S&P 500 has had an impressive start to the year, rising over 4% year-to-date with only three days of negative performance.
However, as the equity market has moved higher, investors have become increasingly concerned about valuation. While it is difficult to ignore the fact that the S&P 500 forward P/E ratio currently sits at 18.5x, well above its 25-year average of 16.0x, we believe elevated valuations may be justified for three reasons. First, 2018 earnings growth is expected to come in around 15%, suggesting investors will be compensated for paying a higher price, and second, inflation and interest rates are both below their long-term averages. In an environment of low rates, low inflation, and healthy earnings, perhaps it is appropriate for stock market valuations to be above average?
Finally, valuation is not a great predictor of short-term returns. As we show on page 6 of the Guide to the Markets, valuation tells you very little about what will happen over the next year, but a decent amount about what to expect over the next five years. For those who are still skeptical about equities given current valuations, it is important to remember that bull markets tend to go out with a bang, rising by an average of 26% during their final 12 months. This makes sitting on the sidelines expensive, particularly in a world of low interest rates.
So are valuations concerning? They have our attention, but we remain cautiously optimistic that equities can continue to push higher. However, late cycle markets require a more nuanced approach to investing, meaning active management will be essential. As such, we continue to see opportunity in the more value-oriented sectors of the market, with energy and financials being two of our favorite ideas.
Low inflation and yields can support higher multiples
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Opinions and statements of market trends that are based on current market conditions constitute our judgment and are subject to change without notice. These views described may not be suitable for all investors. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations. Past performance is no guarantee of future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. ETF shares are bought and sold throughout the day on an exchange at market price (not NAV) through a brokerage account, and are not individually redeemed from the fund. Shares may only be sold or redeemed directly from a fund by Authorized Participants, in very large creation/redemption units. For all products, brokerage commissions will reduce returns.
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