DON’T USE AN AIRPLANE TO PLOW A FIELD

Have you ever been flying in heavy turbulence and watched those big wings bouncing up and down, wondering if they were going to break? Yeah, me too. Given how much weight those wings are carrying and the intense pressures being exerted on them as they travel hundreds of miles an hour, it is a marvel of engineering that the things hold together.
 
Another force acting upon airplanes you may not realize is the pressurization. The cabin steward will politely announce that it is being pressurized for your comfort, but what they really mean is so that you don’t suffocate. At the altitudes most jets fly at you would pass out quickly without pressurization. But the pressurization needed to keep you alive exerts enormous pressure of the structure of the airplane. When I was first learning to fly I was impressed at the red carpet treatment the lineman would give our private aircraft upon landing. But one thing they would never do is open the door for us. I learned that, in the event the plane failed to depressurize on landing, opening a cabin door would create an outward explosive force that could kill anyone standing in front of it.
 
Though powerful structures in the air, airplanes become very fragile once on the ground. Even if being towed at 1 mile an hour, a collision with a ground structure could result in hundreds of thousands of dollars in damages to the wing. The skin of the airplane which can withstand thousands of pounds of air pressure, could be damaged by a mechanic dropping a tool on it. The simple reason being that airplanes are engineered to fly. To get the full value out of an airplane, or any vehicle, you need to first know its purpose.
 
Investment vehicles follow the same principle. You cannot ask, “Is this a good investment?” without first knowing what its purpose is. Investors sometimes complain about perfectly good investments because in a sense, they have purchased an airplane when they really needed a tractor. For example, we call some investments “defensive,” because they are designed to hold up better in difficult markets. Don’t get frustrated if your defensive positions lag behind in a booming market. We refer to other investments as “growth,” since they are designed to take advantage of strong markets. Don’t blame them if they struggle when the economy is bad.
 
When people are unhappy with their investment portfolios it is usually not the investments fault, but more that they are using the wrong ones for the job. With volatility increasing as the election nears, we are already seeing growth investments starting to struggle. Don’t let this panic you. Just realize they were meant for a different purpose.
 
If the markets are concerning you, it may be time to reassess your goals and make sure you have the right vehicle for the job. Remember, airplanes are wonderful at flying, and really bad at everything else. The same could be said of many investments.