Sailing your investment portfolio into the sunset

“In 200 metres, enter the roundabout and take the second exit”. We’ve all become very used to our favourite mobile app or satellite GPS getting us to where we want to go when we’re travelling. Modern day apps provide you with not only the best route to your destination and your estimated time of arrival, but they also direct you away from traffic congestion and other road hazards.

In our busy urban lives, these devices have become a necessity, rather than a luxury and your Uber driver’s livelihood even depends on it. The uses of GPS have grown exponentially and it’s hard to imagine a life without this critical tool that was born out of the 1960s space race.

South African Kirsten Neuschäfer embarked on an extraordinary journey in the 2022 Golden Globe Race (GGR), circumnavigating the globe on her 36-foot cutter "Minnehaha." The GGR, which started and ended in Les Sables-d’Olonne, France, replicated the 1968/69 global circumnavigation of Sir Robin Knox-Johnston, adhering to the technology and yacht design limitations of that era — no GPS, autopilot, or modern maritime conveniences. The 30,000-mile voyage has to be completed alone, non-stop and without any outside assistance.

Organisers track the racing yachts via satellite and there are emergency GPS communications onboard but breaking the GPS seal results in disqualification. Participation requires substantial yachting experience and entry is by invitation only. To the mere mortal this yacht race not only appears impossible to complete but the potential hazards sound terrifying. Kirsten Neuschäfer not only became the first woman to complete the challenging GGR, but she also emerged as the overall winner after a 235-day voyage and a bucket load of two-minute noodles.

After the recent tumultuous years, investors will probably have some sympathy for those 22 sailors that took on the 2022 GGR. One doesn’t need a very long memory to remember the market impact of the COVID-19 pandemic, the Russian invasion of Ukraine, the oil price spike, the rampant inflation, multi-decade high interest rates, the crisis in the Middle East and deteriorating international relations.

Many investors will also remember the bursting of the Dotcom bubble in 2001, the 911 terrorist attacks, the collapse of Enron, the Global Financial Crisis and Great Recession, the Greek debt defaults, BREXIT, and the Trump election. These events from the current millennium all caused waves in the financial markets and tested the mettle of even the most experienced of investors. History is littered with similar events that have raised adrenaline levels, increased the heart rate, and left investors with the typical “fight or flight” conundrum.

For Kirsten, there was no option but to fight during times of bad weather and rough seas. But fighting meant leaning on her experience and adapting to the conditions and doing that sailor stuff (a non-nautical term) that kept the yacht in good condition and on course. There were also times when the yacht was becalmed and that became an exercise in patience as well as an opportunity to go for a swim. The markets are no different for investors. There are those times when it seems like markets are crashing in around you but that’s not the time for flight. It could be an opportunity to tweak (a non-financial term) one’s investment portfolio and take advantage of newly available opportunities, but it remains critical to stay the course to reach that long-term investment destination. Markets can also find themselves becalmed from time to time, sometimes for years. Tweak the portfolio around the fringes then too if necessary but keep the bow pointed forward and wait for the market winds to pick up again.

Investment portfolios are lifelong vessels that do not demand constant attention. Staying the course and adhering to long-term goals is vital to ensuring financial stability and allowing investors to enjoy the sunset of their lives without a reliance on "two-minute noodles."