I am writing this blog post on the 10-year anniversary of the beginning of the great recession of 2008. On Oct. 9, 2007 the Dow Jones hit its pre-recession high and closed at 14,164343. By March 5 of 2009, it had dropped by more than 50%.
I remember the time vividly. As we were producing quarter end reports as of September 30 that showed plans balances at all-time highs, the markets were collapsing around us…
- Oct. 9, 2008: -678.92 points
- Oct. 15, 2008: -773.08 points
- Dec. 1, 2008: -679.95 points
In 2008 as a firm we consulted on less than $1 billion in client assets. There were long days where emergency meetings of the client committees were called. Our investment committee and analysts spent countless hours reviewing the investment managers held by our clients to reaffirm our confidence in their approach and reaction.
The lessons and experience of the 2008 recession contributed heavily to the firm we have become. Those lessons can be summarized as…
- In times of crisis, our priority is to address the questions and concerns facing our clients and their participants. They rely on our knowledge and experience to provide context in chaos.
- When the numbers are terrifying, you must have confidence in the fundamental research you’ve conducted. When all investment products are off 20-50%, relative returns are useless. Only confidence in your knowledge of the investment managers you’ve recommended can help committees avoid reacting.
- Time is our friend. Much of what we did in 2008 and 2009 was educate clients on why acting now, faced with fear, would be the wrong choice. Time has born that out as the right approach.
Roughly 20% of our current clients were with the firm back in 2008, and their patience, diligence, and consistency of approach have been rewarded.
The 17 clients that have been with us prior to Sept. 30, 2008 have seen combined assets that started at $507 million decline to $414 million by the close of the first quarter of 2009, a massive drop over a mere six months. However, I’m pleased to report that as of the close of the third quarter 2018, those clients now have combined assets over $1 billion.
We have learned a great deal since 2008, but nothing so much as that diligence, consistency, and patience are frequently rewarded. From all of us at Multnomah Group, we wish to offer our profound thanks to those of you who experienced the 2008 recession alongside of us. We hold as sacred the trust you have placed in us.
Multnomah Group is a registered investment adviser, registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Multnomah Group does not provide legal or tax advice. Any views expressed herein are those of the author(s) and not necessarily those of Multnomah Group or Multnomah Group’s clients.