July 2020

Don't Worry About What You Can't Change

There are lots of things to worry about these days. We are in the midst of a worldwide pandemic, with no cure and no vaccine. Most scientists agree that what the U.S. is experiencing is not the second wave – it is just a surge in the first. This health uncertainty has caused deep concern among investors and has, from time to time, rattled the markets.

In addition, it is an election year, which also brings some unknowns. Will there be a change in administrations? If so, what effect will that have -- on the pandemic, on the markets, and on the state of our country and our world?

As individuals, we have very little control over any of these things. But if you are spending time worrying about things you can't control, it might help to remember a few facts:

First, the markets are pretty much apolitical. The person in the Oval Office has only limited influence over what happens with the economy and the markets. It is Congress that creates legislation around taxes, regulations, etc., and even their influence is becoming less significant as the global economy grows.

What probably matters more is who is leading companies. History shows us that good, well-run companies can adjust to what is happening in the economy and in the world. They have leaders who have foresight and who recognize coming changes before the changes overwhelm them. They have an organization that is nimble, creative and responsive. As a company, they have a shared vision. They understand that in order to succeed, their company has to continue to meet the constantly changing needs of consumers and the realities of the world around them.

These companies are fiscally strong. That gives them the resources they need to adapt when the situation changes. They never put all their metaphorical eggs in one basket. They are always looking for new opportunities and ensuring that they have what they need to take advantage of these opportunities when they arise.

These are the companies that we seek out at Peachtree Investment Partners. We look for large, American companies that have strong and experienced management, exceptional cash flow and return on invested capital, and consistency in revenue and earnings growth. We also prefer companies that have a long history of paying dividends, which can reduce volatility and add to value.

You certainly should do what you need to do to keep you and your family safe during this health crisis. And you definitely should exercise your right and obligation to vote. But beyond that, there is little you can do to affect the course of the virus or the markets – other than to own strong, resilient companies that are likely to weather this storm and prosper when the clouds clear.

Garry K. Schaefer
Atlanta, Georgia
July 14, 2020

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