We are thinking of our clients, colleagues, friends and neighbors right now.
This is an unprecedented financial and social moment. Business activity around the world has been halted due to shutdown measures put in place to slow the spread of the virus. While we have seen record levels of stimulus intended to support markets, businesses and individuals, a slowdown in economic growth and earnings is inevitable. We expect uncertainty to continue and, as a result, for the ups and downs in markets to continue, too. As the days turn to weeks and weeks to months, we, as both a society and investors, will have a clearer sense of the true impact this pandemic will have on our lives and our economy. Our expectation is that in time, businesses will welcome back customers, new ones will open their doors, the crisis will pass and stock markets will continue to reward investors who remain focused on their long-term plans and goals.
Meanwhile, COVID-19 fatigue is becoming real for many, as we have adjusted to new lifestyles and a new reality that can feel like we’re living the same day, over and over again.
Over the past few weeks, my mind has returned to the mighty redwoods that grow from central California to southern Oregon. I have revisited peaceful moments in the forest standing under the majestic giants, breathing in the fresh air and looking up to see as much of the trunk as I can before the branches disappear into the sky. Suddenly awestruck, I feel connected, rooted and calm. The ancient redwoods can live for millennia and have seen more change than I have or will see in my lifetime.
It got me thinking: what can we learn from the redwoods about seeing the forest from the trees (if you will) during times of uncertainty?
Redwoods lack a taproot, or the main root that would grow down and anchor the tree. If they don’t have deep roots, how can they grow so tall? They link roots with their neighbors. Redwood roots extend outward (100 feet or more), intertwining with neighboring trees to provide a strong network of support. Together, they withstand winds and storms and stand tall for hundreds – and even thousands – of years. Redwoods remind me that at the root, life is a set of relationships and we are not alone.
In times of fear we may instinctively contract financially and personally, holding on to cash and withdrawing from others. While it’s practical to save in times of uncertainty, it’s also been proven that we experience boosts in happiness and physical health when we find ways to share. Recognizing we have something to share also helps us overcome a sense of scarcity and reinforce to ourselves that we have “enough.”
We don’t have to weather this alone. Now is the time to lean on each other and practice being interconnected. We can fortify one other by sharing our wisdom and resources; being a sounding board or a compassionate ear; and standing together (6 feet away) to serve our communities and lift each other up. Redwoods are stronger together.
Redwood trees are incredibly resilient, showing new growth even after being scorched by forest fires.
The market is similar. When fear spreads like wildfire and sends the market into decline, it can seem like there’s no hope for renewal. But time and time again, we’ve seen the market decline and bounce back. The key to success in your investment strategy is to remember to keep a long-term mindset through the ups and downs.
Since 1987, every major decline in the U.S. stock market has reversed itself between 21% and 68% within the next 12 months1. Stay rooted in your plan.
In the meantime, we can work together to review the foundation of your financial plan: cash flow. Regardless of the size of your portfolio, having concrete knowledge of how much is coming in and how much is going out allows us to ground and plan by the numbers – not the potentially unlimited worrisome scenarios in our minds. Planning (and reviewing our planning) gives us the power to adapt creatively to change.
There is a lot that we can learn from the strength and serenity that the redwood trees have demonstrated in the face of centuries of threatening conditions.
If you were to look at a redwood’s rings, which mark growth from year to year, you might notice wider rings indicating good years with lots of water and light and narrower rings, indicating years with less water and light.
Markets, like nature, can be cyclical. There are expansive times and times of contraction. There are ups and downs: growth isn’t always linear.
Even though this moment may be one of great struggle, like the fires and storms braved by the redwoods, this too shall pass.
Do you feel rooted right now? What do you need to feel a sense of connection, resilience and calm?
Fun fact: Studies2,3 suggest that viewing even an image of a tree or a forest canopy bolsters the parasympathetic division of the central nervous system, which naturally induces calm.
So go outside! Feel your feet on the ground. Breathe. As John Muir once told Ralph Waldo Emerson, “You are yourself a Sequoia. Stop and get acquainted with your big brethren.”
Anne B. Johnston
Managing Director at Created
Original block print by Liana Vitousek, Carmel Valley, California
 BlackRock and Morningstar
 Jiang, B., Li, D., Larsen, L., & Sullivan, W. C. (2016). A Dose-Response Curve Describing the Relationship Between Urban Tree Cover Density and Self-Reported Stress Recovery. Environment and Behavior, 48(4), 607–629. https://doi.org/10.1177/0013916514552321
 van den Berg, M. M., Maas, J., Muller, R., Braun, A., Kaandorp, W., van Lien, R., van Poppel, M. N., van Mechelen, W., & van den Berg, A. E. (2015). Autonomic Nervous System Responses to Viewing Green and Built Settings: Differentiating Between Sympathetic and Parasympathetic Activity. International journal of environmental research and public health, 12(12), 15860–15874. https://doi.org/10.3390/ijerph121215026
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