The Calm Investor?

After almost three months without an entry, it seems overdue to post something. My lack of activity on this blog mirrors both my attitude and my inability to find compelling buys. After adding some shares of Johnson & Johnson on Christmas eve, I felt excited about growing my portfolio in 2019. Now, with the North American markets attaining new highs almost weekly, I find myself with more cash in my portfolio than ever before.
Instead of opening up cans of worms regarding market timing or anchoring on past prices, I thought I’d write about my pre-occupation of late: calmness. It seems like rather I’m reading about meditating, listening to a podcast about how to be a better parent, or learning some kernels of wisdom from Howard Marks about business cycles, the importance of remaining calm and avoiding unwarranted action keeps re-appearing.

There are a lot of conflicting pieces of advice about investing, but one of the few universal truths seems to be that the ability to control your emotions, keep fear and greed in check, and respond to opportunities in a calm and rational manner is a winning formula. Trying to develop a sense of calm, being perfectly happy to do nothing, not yearn for more (action, stocks in my portfolio, possessions, etc.) has been, and will continue to be, a huge struggle for me. For example, here’s one of the needy, anxious, greedy thought patterns that plays in my head: If you added a few more higher growth/lower yielding stocks to your portfolio at more frequent intervals, you’d have more to blog about, you’d achieve a higher dividend growth percentage, you’d add more income, you could follow more exciting holdings, you’d be a more interesting person, etc., etc., etc.. Crazy? Yes. Destructive? Definitely! Yet, it’s a story that plays far more than I wish it would.

I failed at developing a mediation habit last fall. Focusing on my breath, for a mere five minutes at a time, without my thoughts wondering in a hundred different directions, was too much of a mental challenge for me. Forcing my mind to be calm, instead of letting it run wild, proved nearly impossible. On the bright side, I did find that focusing on my breath was helpful in getting to sleep at night. That was a nice silver lining.

With my son and daughter approaching five and two respectively, calm is not a word I’d use to describe my home. Some nights, both kids run laps around the kitchen/dining room/living room screaming, laughing and crying. After she wakes up, my daughter finds it hard to keep calm in bed at 5:30am in the morning for less than minute before starting to cry. Then she likes to play with mom and dad in our bed as we’re floating in and out of consciousness. My moments of calm around the house tend to come when both kids are in bed, my wife’s out somewhere, and I find myself with an hour or two to spend as I will. Instead of enjoying the solitude and embracing the calm, I tend to read, watch a show or contemplate a work problem. Although I think I’m decent at remaining calm when the kids are riled up, I need to improve my ability to be comfortable doing nothing on my own.

I’m not sure if I’ve become calmer as an investor, or that I’ve deprioritized it as an activity. I still think about possible transactions, spend time researching companies, read some filings to monitor my holdings. It’s the pulling the trigger to buy shares with a feeling of conviction that I have lost. I’ll likely not achieve my portfolio goals of adding forward dividend income this year. It’s part of where I perceive the market to be (frothy, eighth inning, few obvious opportunities), it’s a bit because of some of my holdings provided pathetic dividend increases (i.e. Coca-Cola, Tanger, etc.), and it’s also due to a calmer attitude. Ultimately, I’m happy at my job, fulfilled with my family, so meeting a stretch forward income goal doesn’t seem to matter much anymore.  

Two and a half months into 2019, this entry sums up my attitude and progress pretty well. I feel like an odd combination of the turtle and the hare in the famous fable, had the turtle pulled off to the side of the road and took a nap in the middle of a race against the hare. I’ll enjoy my slumber, let the hare sprint ahead, appreciate the calm, and we’ll see how long it lasts.