For the past few weeks, our blog posts and articles have focused on existential threats – primarily disruption to global trade – to the markets. There are a few mature reactions to such threats. Assuming we avoid the fool’s knee-jerk reflex of trying to time the market, then maintaining a disciplined investment outlook to achieve long-term strategic goals is generally a sound approach. While this overarching strategy is prudent and sound, it also appears overly passive. Surely there must be more we can do to respond to threats to the financial well being of our retirement plan participants or charitable beneficiaries.
The classic serenity prayer opines, “Grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.” There are some actions a retirement plan sponsor or charitable organization can take to tailor their investments & allocations to fit the current market environment. However, allow us to step outside of the classic investment consulting role for a moment, because stories about investments & market risk, while engaging, is typically the most acknowledged element of being a fiduciary. Fiduciaries face underappreciated threats that deserve a more proactive stance. For instance, we hope our readers have been aware of the increased need for data security, both from the standpoint of satisfying regulators & law enforcement as well as the practicality of defense against real-world threats. If the additional anxiety caused by volatile markets is making you look for positive outlets – here’s something you can do: bolster your security. Find out how your data is backed up in case of a ransomware (or other cyber attack), natural disaster, or just an old-fashioned accident (like an onsite fire). Check on information transfer security transfer protocols, such as sending files securely or by redacting personal identifying information. Plan sponsors can’t control the markets; on the other hand, they often have a great deal of influence on business practices which can have an equally great impact on financial security.