I know one of my partners has been under tremendous pressure over the past couple of weeks. The recent volatility has hit his portfolio and with it came the inevitable questions from frustrated investors: Is the strategy still working? Has the methodology stopped working? Should we be doing something different?
I understand what he has been going through. It is never easy to stand behind a systematic, fundamentals-driven strategy when markets decide to test your patience and your phone starts ringing a little more often.
The funny thing about investing is that when performance is good, everyone is happy to praise the strategy, the methodology and, occasionally, the genius behind it. When markets turn against you, those same people suddenly become very interested in questioning every assumption.
That is the nature of investing. Weak periods are part of the journey. The real challenge is not having conviction when everything is going up, it is maintaining that conviction when volatility makes you question everything.
I have seen enough market cycles to know that patience is not always comfortable but fear-driven selling can be expensive. The applause is usually loudest at the top. The real test comes when it stops.