• Monmouth Capital

Q3 2020: Watching America






















All my life

Watching America

All my life

There's panic in America

Oh oh oh, oh

There's trouble in America

- Razorlight, “America”


Watching America from across the water, it is tempting to think we are seeing the decline of an empire, a crumbling mess of infernal politics, race riots, guns and violence. I’ve lost track of how many times the upcoming presidential election is described as “unprecedented” (surely the clear winner of Word of the Year 2020); the situation certainly feels highly uncertain and fraught with risk.


But I think we always believe our times are uniquely risky and uncertain.


I ask myself what it would be like living in the US at the end of the 1960s:

  • JFK, Robert Kennedy and Martin Luther King were assassinated.

  • The Cuban Missile Crisis had taken the world to the brink of nuclear war.

  • The Vietnam War lurched from misadventure to catastrophe.

  • Mass protests about the war and Civil Rights led to riots and violence on the streets; police shot unarmed students dead on campus and troops were frequently deployed.

  • A populist, paranoid President rose to power (and fell spectacularly from grace a few years later in the still-incredible Watergate scandal).

  • Over 1 million people died worldwide from a pandemic, “Hong Kong flu”, from 1968-1970.


Those were pretty crazy times. To take one of those events, I think we too easily forget quite what a profound effect the Vietnam War had on the United States. Vietnam shaped a generation politically, culturally and militarily. It has receded into the certainties of history but at the time, the eventual outcome and the path to that outcome were wildly uncertain.


From a bewildered White House struggling to comprehend how it got into such a horrible mess, all the way down to individual families torn apart by loss or by opposing views of the war, much of the nation was gripped by the course of the Vietnam War in one way or another.


So is it really fair to say that life in October 2020 is more uncertain than it was in October 1970? My gut says yes because my current experience is so dominant – it feels true. But an examination of the facts tells me that it is unlikely to be so.


We can be spurred into making poor long-term decisions based on that heightened and often unwarranted feeling of uncertainty and risk. What if we had a physical barrier to stop those immediate, short-term feelings leaking into our long-term decision-making?


In our bodies, we have something called the “blood-brain barrier”. This incredible feature of the human body is a tightly-packed layer of cells in the brain and spinal cord that prevents bacteria and viruses from passing from the blood stream into the central nervous system.


I think of the blood stream as being a bit like how life feels living in the moment: constant noise, rushing, loads going on, all manner of unhelpful matters being pumped around the system. A crucial part of our job at Monmouth Capital is to act as a barrier to stop all of that affecting long-term decisions about our clients’ wealth.


With stock markets in freefall in March 2020 we faced the sternest possible test of this role. We were in touch with clients then – not to make kneejerk reactions but instead to reaffirm strategy. In some cases, we helped to deploy surplus cash – at a time when, for so many investors, the urge to sell was overwhelming – to take advantage of lower prices to add more of the assets we want them to hold.


We are the financial “blood-brain barrier”: the ones that fight all the time to keep perspective, to take the long view, to build strategy and help you to stick to it.

FS

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