Thursday, July 18, 2019

Reasonably Certain Advice from Mark Nickel

Mark K. Nickel, CFP, CIO
Author position
Chief Investment Officer

Let me introduce myself: I am Mark Nickel, recently named President and Chief Investment Officer of Hilliard Lyons Trust Company (HLTC). Most recently, I served as CIO for Hilliard Lyons. In that role, I developed Hilliard’s view of markets while overseeing all internally generated client-facing investment strategies, including all HLTC investment offerings. Active in financial services for over two decades, I started with Hilliard in 2002 as a Financial Planner, then moved to HLTC in 2006 as a Portfolio Manager.

Every quarter, I will use this space to address a current event or “narrative” popular in financial media.

Emotion vs. reason

Financial reporters eager for clicks don’t get attention with “Dog Bites Man” headlines – so sometimes financial news gets sensationalized. Over the last 20 years, I have often found that clients can get emotionally (sometimes irrationally) affected by an event or trending narrative. I’ve even had them call me, asking whether they should sell everything immediately in response to apparent bad news. If, as in that case, they are overreacting, I add the most value by addressing the issue, providing fact-based context. That context usually means reminding clients of triedand- true principles such as patience, prudence, and sticking to one’s investment plan.

What narrative has captured my attention this quarter? It’s uncertainty, coming from many sources – geopolitics (Iran) politics (2020 election cycle), trade policy (China, Europe, Mexico), Fed policy (will they cut rates?), yield curve (is it inverted?), corporate earnings (back-to-back negative quarters), investor sentiment (bullish to bearish and back again), etc.

The financial news echo chamber

Do we have more uncertainty now? Or does it just feel like it? Are our telescoping news cycles and social media presence preying on our emotions more than ever? It’s easy to get caught in a financial news echo chamber. The more we are connected to media, the more uncertainty is generated and the more we then need to check our news sources to reassure us. Then a fresh set of headlines can start that crazy cycle again.

The prudent thing to do is to take a deep breath, turn off the constant barrage of media, and remind ourselves that we are adhering to our financial and investment plan. I hope to use this column to raise the voice of reason, giving you the perspective you need to reliably separate the true signals the market is sending from noise you may hear in financial media.

HLTC and Baird

One last thing: As you may already know, HLTC is now part of Baird. I was fortunate enough to join a group of Hilliard Lyons Trust Company associates at Baird’s 100th Anniversary celebration at their Milwaukee headquarters in June. To a person, we came away convinced that Baird truly does focus first on clients. (A close second is Baird’s focus on its associates.) I feel strongly that you will benefit from our joining this employee-owned, privately held firm that consistently puts clients first.