If you have been a client of Atchley Financial Group for any amount of time, I am sure you have noticed our logo. A mature oak tree on a field of blue. From a marketing perspective, our logo represents the idea of stability and prosperity. Did you know that our logo has a much deeper meaning for our firm? The mighty oak that you see on every piece of communication from Atchley Financial is also a symbol of our investment philosophy and our faith in the great companies of the United States and the world.
Forces of Nature
A tree left to its own devices will find a way to grow. Built into its DNA is the knowledge and ability to utilize its surroundings and produce healthy leaves and strong boughs. What could be a more accurate symbol to represent our faith in the equity market (aka stocks)? Nick Murray makes the same analogy in his book Simple Wealth Inevitable Wealth. He states, "Wealth is no less organic than a tree; the growth of wealth in equity funds are no less than a force of nature."
Far too often, investors will cave in to human nature and intervene in their portfolio's organic long-term growth. Nick Murray continues, "You don't dig [a tree] up every 90 days to check on its progress…You don't uproot the tree and store it in your garage over the winter." This kind of behavior can damage or even kill a tree, and the same goes for your long-term retirement.
To wit, the oldest tree in the world, named Methuselah, can be found far up in the white mountains of Inyo County in California, away from civilization and human intervention. This Great Basin Bristlecone Pine looks like it has been through hell, but it is almost 5,000 years old and still alive.
You may remember a lesson from grade school about counting the rings of a tree to tell you its age. As a tree grows, it encounters rainy and dry seasons. A tree will do most of its growing during the rainy seasons, producing a wide ring that is lighter in color. During the winter or dry seasons, a tree will slow down its growth and create a narrow, dark ring. During those meager months, the tree is actually producing more rigid cells. As trees age, their rings become the toughest, most resilient part of their structure.
One can easily compare these rings to the economic business cycle. Businesses expand during economic prosperity, but when the economy contracts, businesses buckle down, slow production, and create more resilient business plans. The contraction portion of the business cycle is crucial to creating durable and successful companies.
You may be thinking, "Well, if it's as simple as planting a tree, why can't I just do it on my own?" The fact is although trees can grow easily on their own, poor placement and care can lead to damage for both the tree and its surroundings. Real Estate developers will hire arborists to choose the right tree for each location to ensure longevity. One should apply the same principle to Financial Advisors. They work with you to create a plan to place assets properly to promote longevity. Just as an arborist may prune and mulch a tree that is suffering, so too does an advisor tend her clients' portfolios.
So, the next time you see our logo in our email signature, we hope it will remind you to stay the course through up and down market cycles.