The Challenge of Doing Nothing
By Brian Aberle
“Don’t just do something. Sit there.” – Silvia Boorstein
“Take these antibiotics and, oh, try doing nothing for a while.”
That was the prescription from a recent visit to my physician, which further required a sooner-than-planned visit to a gastroenterologist for a “gut ache” that seemed to be ever present as of late. The good news was that there seemed to be no serious issues; the diagnosis was conclusive that my near obsession with the business side of life had caused my body to be locked in a funky fight-or-flight mode. The bad news was that I was somehow going to need to figure out how in the world to do nothing in order to re-calibrate my nerves after several years of pushing the engine to its red line. When pressing the doctor (as I annoyingly tend to do) by asking “Surely, we should be doing something, right?” He replied, “No. Nothing.”
As any obsessive and activity-consumed person (like me) would do, I started to web search this crazy notion of “doing nothing.” As it turns out, there have been countless articles such this one which simply suggest that if we look to free ourselves from social media, turn off the TV (particularly the financial news for me), and maybe put the never-ending checklists to the side for a while, then it can actually be kind of good for our health.
While this concept seems quite simple, the action (or non-action) of doing nothing and/or sitting still is far harder in practice. On a personal level, I stink at doing nothing. Heck, I’m such a hopeless multi-tasker that I actually listen to audio books while mountain biking, as absurd as that sounds. I knew this “nothing” experiment was going to be hard.
Now, you may be asking at this point “What in the heck does Brian’s recent medical issue have to do with investing?” Well, as many clients know, I’ve long advocated doing “nothing” as an action plan with respect to portfolios, especially during curious times in the markets like today. To illustrate, let’s say today is a just another day in the life, where you open the news to read the following (fictitious, but somewhat relevant) headlines:
“How You Are Missing Out on the Crypto Currency Craze” – Mad Speculators Magazine
“Why the Stock Market Is Going To Drop By 50% Next Year and Why to Get Out Now” – Same Old Subscription Service (that has said the same thing for 20 years and just wants you to buy gold, barren land in Nevada, or a proprietary insurance vehicle)
“Why Bonds Are the Next Bubble Waiting to Burst” – Nostradamus’s Financial Almanac
“How Whatever You Think You Should Be Doing Is Wrong” – We Are Smarter Than You Media
When clients and acquaintances reach out to me sharing similar, albeit less ridiculous, articles such as the above, the common appeal sounds similar to that of mine with my doctor: “Surely we should be doing something, right?” To this I have I have often replied, “No. Nothing. Just relax for a bit.” I imagine this response can cause frustration in those moments. After all, my clients pay me good money to be their advocate and to do what’s right for them, not to do nothing. It’s quite audacious for any professional with years of experience to say something as simple as “Do nothing and you will be better for it,” yet this is precisely what my two decades of experience has taught me.
Investing is nothing if not boring … most of the time. While the three (at last count) 24/7 news channels tend to goose up the excitement level, and would like to imply one is “missing out” if not trading daily, I believe the best investors tend to be very patient and allow time to work to their advantage. It’s perfectly OK to read about and observe the markets as often as one may like, but the reality is that good investors can go months, if not years, without making heavy duty adjustments. Currently within our investment practice, we do more robust re-balancing just two times a year, with more micro-adjustments in between. Otherwise, we try our best to do nothing and let the process play out.
“Doing nothing” does not suggest that one can get away without monitoring portfolios. Quite the contrary. Most days, I read the financial news (so that my clients don’t need to), research and sift through innumerable industry-related articles to find those with actionable information, and then process all of this information to determine if changes are in order. If possible action requires further review, I assess the situation, look at ways to stress test the outcomes for multiple client portfolio types, and then determine if we should do something now, or flag it as a potential modification for the next rebalance. In other words, it takes a lot of work to do nothing.
With equity markets at all-time highs and with investor fears at an all-time low (per the volatility index), the voice within for many is suggesting that we ought to do something; that just sitting there can’t possibly be good for our financial health over the longer term. Yet, history has suggested that resisting the urge to react can be just as sound in really good markets as it has historically proven in bad markets. With our deep review process coming up in January, and given the stock market returns over the past 24 months (or 8 years depending on one’s view), we certainly anticipate some adjustments to our client allocations. Yet, as usual, don’t expect any fireworks.
Personally, I am a huge believer in the many benefits of movement, but I’m also learning how to better parse out time to “do nothing” (or let’s just say “less”). I’m also appreciating that the act of nothing means something different for each of us. For me, nothing is more of a process of keeping my mind still and/or focused on one task rather than the normal 50. Though I’m just a few weeks removed from my doctor visit, my efforts seem to already be paying off. If you have been feeling angst or anxiety of late, might I prescribe you take a dose of “nothing” and call me in a couple weeks.
Aberle Investment Management LLC, is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.