A helicopter crash and investment fear?


A helicopter crash and investment fear?

During a discussion this week about fear in the investment markets one of our advisers, Bryan Dunlop, mentioned to me that his only experience of a helicopter crash and managing fear had similarities to managing an investment portfolio. Intrigued, I asked him to tell me more.

Bryan said,

I was commissioned into 2nd Gurkha Rifles in 1985 having joined the army as a soldier. In February 1986, we deployed to the Falkland Islands, I’d only been an officer for a short time.

On one of the first nights I was woken, as it emerged that a Chinook had crashed and at least one person had been killed and many injured.

Uncertainty and fear!

I ran to a waiting Sea King helicopter with six of my team. As we flew towards the crash site I started to think about what we might find when we got there. I assumed the worst. I had never seen the results of a helicopter crash, I wasn’t sure how I would react. These people weren’t strangers after all, they were friends and colleagues.

I made a decision to stop speculating about what I was going to see and instead think about how I would deploy the men when we landed. We all had to establish the facts and very quickly.

Without the facts our decision making was going to be flawed.

I focused on my first aid training and how we had to make sure the men were safe from any additional hazards such as fire, or an exploding airframe, before we started to attend to their injuries.  My second in command was sitting beside me and I shouted over the noise of the helicopter to explain what I thought we were going to have to do. This planning and shouted conversation was the distraction I needed at that time.

Assess the situation

My focus had switched from worrying to problem solving.  We were all straining to see our first glimpse of the crash site. When we did eventually see it, about three or four hundred feet below, the enormity of the situation sank in. The Chinook was lying on its side and both sets of rotors had completely disappeared. The snow and ice around the crash site was stained the most vivid colour of red. My worst anxieties were being confirmed.  There had been four RAF members of the crew and twelve Gurkhas on board. It’s likely that the helicopter had hit the mountain and bounced forward at speeds in excess of one hundred knots. We had had no information regarding casualties but I now expected them to be very heavy.

Once we landed, I was told that one of the RAF loadmasters was dead and the other one was badly injured. The pilot had been thrown out through the front of the helicopter and was still fastened to his seat. The co-pilot was stuck in the wreckage of the cockpit. The twelve Gurkhas in the back of the aircraft were still alive but were very badly injured.   We picked the three most seriously injured casualties, which included the platoon sergeant, and loaded them onto the Sea King.

We endured between six and seven hours of almost complete chaos at the crash site as we loaded all of the remaining casualties into the second Chinook helicopter. All of the men were in a very bad way. It didn’t help that their advancing states of hypothermia meant it was virtually impossible to establish intravenous drips because we couldn’t find veins in their arms.

The 11 men we managed to bring in that day were all badly hurt, but they survived. My experiences in that 24-hours taught me many things about fear and anxiety. If you begin with the attitude that things might change, then you’ll be prepared to respond when you need to.

That way, when it does go wrong, it won’t be a big shock.

So what are the parallels to the world of wealth planning?

 

We rely on the media for facts. These facts can be interpreted a number of ways. The media, in the main prefer a negative headline than a positive one. That’s well known.

As I speak to people who have invested with me, we’re seeing that the FTSE 100’s performance is having a huge impact on how people feel about having invested.

If you’ve invested 100% into a FTSE 100 tracker then the FTSE is entirely relevant.

If your portfolio, whether a pension or otherwise is properly diversified, the FTSE slightly loses its relevance.

Our clients are telling us that our portfolios have held up very well. That is in line with our strategy. It’s a positive story.

In summary – when dealing with challenge:

  1. Establish the facts.

In my conversations with clients, establishing the facts has been the starting point. Removing speculation about the facts defines the conversation.

  • The plan

Unless something has fundamentally changed, stick to the plan. If the goal is clear (save lives/grow your wealth) then everything you do is directed at the goal.

  • Manage emotion

Easier to say than to do. Consciously focus on the positive news, it may be hard to find but it is there. Use distraction to channel your focus. Focus on solving the problem not on feeling sorry that the problem has occurred.

  • Respond, don’t react

Respond to what’s going on (in a considered way), avoid rash, reaction. It can be hard to do nothing but it’s often the right thing to do.

Challenge is ever present. When life is ‘normal’, challenge is usually just around the corner. As a wealth planner, my goal is to help clients devise a plan and to stick to it when times are challenging.

If you have investments and are concerned about how they are doing please either email or call and we’ll do our best to help.