Music and Investing –
An Idea for a Variety of Disciplines
My guitar teacher is a remarkable person. Justin has motivated, encouraged and led hundreds of people on the journey of musical awareness. He is one of the best guitarists in our area, and perhaps more importantly, has the patience and leadership to encourage others to pursue their musical dreams.
One important aspect of being a good musician is knowing when to play, and knowing when to be silent. There is a technique guitarists employ known as palm muting. In simple terms, the guitarist uses their right hand to silence the strings that should not be ringing out. As with many things in life, the key is knowing when to mute, and when not to mute.
One thing that makes Justin such a great teacher is his use of humor when things are not working well for the student. On the occasions that I let too much extra noise come from my guitar, he will smile and say “more muting.” Since it can be in my nature to over correct, the next thing that often happens is I apply too much muting, and there is not enough sound coming out. His simple response is to laugh and say “less muting.”
The world of investing can be similar in many ways. There is no shortage of noise regarding the markets, with opinions being shouted from every rooftop. We turn on the TV and are exposed to seemingly intelligent people bellowing their views of what will happen next in the market. We head out for a drink, and our friends noisily debate what the Fed will do with rates, what will happen to oil prices next, and what effect the government’s tariff policies will have on their portfolios. Turning to social media, we find that every other post has someone’s view of what dire consequence may be ahead.
The concept of muting can be applied to many different aspects of life, but it becomes especially important when looking at the principles of successful investment management. When there is too much noise around us, and our decisions are being influenced by fear, our response should be “more muting.”
At SignalPoint, the very beginnings of our company and many of our key processes are based on principles similar to muting. Each day in our business can bring about wild fluctuations, the ever changing market soaring to all time highs or plunging to seemingly devastating weekly or yearly lows. It is likely you have witnessed many of these market swings and possibly felt their impact, good or bad.
Often times other firms will invest time and energy in market research, enlisting a team of “experts” in an attempt to predict when and where the next market shift will occur. This prediction process, despite the considerable resources involved, is rarely correct and seldom provides investors with any certainty.
At SignalPoint, we believe that accurately predicting the ebb and flow of the market is impossible. Instead we focus on simple, repeatable procedures that allow us to carry out our unique, emotion free investment process. This consistent discipline helps eliminate the fear investors associate with markets because they know that a plan is in place to effectively manage their portfolios. Muting allows us to focus on our clients’ long-term goals, and our investment management strategies reflect this in-it-for-the-long-haul focus.
Muting allows me to spend my time more effectively, focusing on my clients’ needs instead of the daily fluctuations of the market. Although I am well-informed and keep up with current events, I did not become a financial advisor to analyze stocks and spend hours crafting spreadsheets to track market performance. I helped create SignalPoint because of the opportunity to provide clients with access to a sound and unbiased investment approach.
I believe that muting as an advisor helps my clients achieve their long term financial goals. As Justin continues to help me become a better guitarist, I will continue to help my clients focus on hearing what matters most and blocking out the extra noise.
To be silent at the right time, and to be bold at the right time are essential components for making music, and for building a solid and lasting financial plan.
– Jon Timson