Having completed 14 flights on my Investment Trek up through Germany (and 3 with more flights to go before I’m back in the U.S.), I opted for a different mode of transportation to get to Switzerland. The alternative selected? A good ol’ fashioned road trip through Austria and Liechtenstein. It’s hard to beat a drive through the stunning mountains, quaint townships, and rural farmlands between Munich and Zurich.
I occasionally get a few wrinkled brows about the wisdom of driving in other countries. I wholeheartedly agree that it would be a foolish endeavor to even attempt to get behind the wheel in places like Indonesia, India, or Egypt. Driving in Germany, Austria, and Switzerland, however, is an outstanding experience. The roads are wonderfully maintained. The routes are clearly marked. The rules (including speeds and lane markers) are well-established and universally followed.
The same can be said of doing business in Switzerland. The infrastructure for business is amazing and wonderfully maintained. The routes for capital and investment are clearly marked. The rules for business and commerce are well-established and followed. Is it any wonder why companies continue to flourish in this region?
Switzerland is a country of unmatched order and precision. When it comes to the hallmarks of Switzerland – time and money – order and precision are paramount. Every second counts and every penny matters.
Lunt Capital believes the same thing when it comes to time and money. Regarding time, we believe that good investing takes time. That is, a real investment requires a real investment time horizon. Real wealth is not created in minutes, hours, days, weeks, or months. Instead, we believe real wealth can be created over longer-term investment cycles.
The short-term volatile swings in the market are unsettling to all investors, but they are an important and ever-present characteristic of the investment landscape. In the short-term, markets move around… that’s just what they do. Sentiment can swing from positive to negative in minutes and portfolios with significant market exposure will experience many of the same swings.
The question we continually ask ourselves as we manage assets is, “Is the strategy behaving as we expect it to?” Each of our strategies has very specific personalities and characteristics. These “personalities” range from conservative to aggressive and are based on the needs of each investor. Our strategies continue to behave as they’ve been designed and as expected.
Some strategies can adjust to get very conservative by essentially removing exposure to the more volatile asset classes. Other strategies designed for long-term growth maintain market exposures, even in times of significant market volatility. We keep these aggressive portfolios invested through volatile times because some of the most dramatic outperformance has historically come immediately after short-term market corrections. The timing of such changes is difficult to predict… so we adapt.
The short-term decline in markets and portfolio values is never fun and it always raises concerns, but we remain committed to our long-term investment process. We believe a disciplined, objective approach will produce strong results, relative to the risk taken within each strategy.
Regarding money, like the Swiss, Lunt Capital believes that every penny counts. The responsibility of investing and managing the hard earned assets of so many is very serious business at Lunt Capital. We are constantly on watch. We are continually monitoring and evaluating our positions relative to the markets. We’re watching every penny because it matters to you and it matters to us.
I leave Switzerland with a renewed appreciation for the value of order, precision, and discipline. The Swiss have found great success in their efforts in these areas. We believe an investment process based on order, precision, and discipline will also lead to successful outcomes. Volatile market times may test the resolve of many to follow such a process, but we remain committed. In our view, it’s the right way to invest and the right way to grow and/or protect real wealth.