We had training sessions at Merrill Lynch, regularly. This day, a friend – let’s call him Mark – showed up in our conference room earning immediate respect by his style of dress. He dialed down the formality of his presentation by carefully removing his jacket. His starched white, wrinkle-free, fitted-collared shirt was the backdrop for his power tie, matching braces (suspenders), athletic build, and commanding presence. He opened his presentation with a story that I will never forget. The story illustrated the importance of Investors in the stock market being trained to manage market volatility and its side effect – fear.
As a lifeguard on the Eastern Seaboard, Mark was trained to follow specific protocols in a variety of situations. He was trained to look “left-to-right” and scan the beach, being attentive to anything that could be a potential danger to the people he protected. If something was identified as being suspicious, but not necessarily harmful, he was trained to blow his whistle one time to alert the other lifeguards on duty that something he sees appears out of order, but no need to act. If while scanning the beach from left-to-right, he identified a circumstance that presented a potential threat to the safety of even one of the persons on the beach, the lifeguard was trained to blow his whistle twice, hustle down from the lifeguard station, and immediately investigate the issue to a resolution.
If while scanning the beach, Mark identified an imminent threat or danger, he was instructed to blow his whistle three times to alert the other lifeguards of the dangerous circumstance and to immediately hustle down from the lifeguard station with a buoy thrown over his shoulder and run to that location as fast as possible.
My friend was telling me this story and said that one morning, as he was at his post scanning the shoreline from left-to-right, he was at about “10 o’clock” and saw roughly a dozen people standing on a sandbar in shallow water, only to have a wave crash into shore and the undercurrent pulling all twelve people off the sandbar and into the deep. A Riptide!
Mark said he immediately began to blow his whistle three times and kept blowing it as he grabbed his buoy, slung it over his shoulder, and in one fluid motion hustled down the ladder and ran as fast as he could in the direction of where there were once people standing. He ran into the water until he could run no farther and then dived in with the buoy still strapped to his body, passing people who were in shallower water attempting to catch their breath. His lifeguard training taught him to swim to the farthest person first. So, as he passed others who were struggling to gain their balance in the water, his mind fixated on the person who was farthest away and swam to him.
As he approached, he could see that this “Swimmer” was a middle-aged man who had become hysterical, shouting in desperation at the top of his voice, “I’m going to drown!!! I’m going to drown!!!”
Training taught my friend to extend an object, but never your arm, to a “Swimmer” who felt their life was in jeopardy. He did as he was taught. He reached for the buoy, held it high in both hands while using his legs to propel his upper body out of the water; and with the buoy raised up high, he shouted to the man from a few feet away, “Take the buoy”!! The man’s only response was to continue his hysteria by claiming that he was going to drown and saw no other solution, even though the solution was staring at him just a few feet away. My friend, holding the buoy high in the air, shouted again “Take the buoy!!” The man still did not respond to the command but continued to seemingly fight for his life. But oddly enough, the man never raised his hands to swim and seemed to only use his legs to keep his head above water.
Well, as my friend had been trained to do, when a “Swimmer” will not take the buoy, he smacked the man in the forehead with the buoy, hard, and you can guess what the man did next: he grabbed the buoy. But just as he did, up from under the water came two young boys, ages eight and eleven. These were the man’s two sons. The man, in all his hysteria, was drowning his own sons to protect his life. He panicked! He was not trained to manage this volatile situation.
The point was made very clear that day: It takes time, experience, and specific training to anticipate many of the dangers we face when investing. It also requires character to do the “right” thing when under sudden pressure.
VisionWise Capital has been protecting investors for nearly nine years using the same protocol: purchase tired apartment properties, renovate them inside and out, stabilize the increased rental income, sell for a profit, and repeat the protocol. With an aversion to debt, our Fund IV has been compared to a welcomed flotation device against the unpredictable volatility of the stock market.
Consider the solution of apartment real estate as part of your investment portfolio. It can keep your income flowing during volatile markets. And consider the conservative income strategy of VWC’s Multifamily Fund IV as the proverbial Buoy. I recommend that you “Take the Buoy!”
The time to buy income property is now!