Sailing the Stormy Seas

Americans often romanticize pirates. We entertain ourselves with their stories, make movies about them, and from young ages, make believe about being pirates. Every year, there are neighborhood kids that dress as pirates for Halloween, and if you spent a year reading novels about pirates, you probably would not run out of entertaining books. Mark Twain captured the sentiment best when he wrote, “now and then we had a hope that if we lived and were good, God would permit us to be pirates.” (Life on the Mississippi, Twain, 1883) While there are a variety of reasons why pirates capture our imagination, there can be no swashbucklers, no buccaneers, no privateers without a sailing ship. There is something about setting sail on ship that harkens to freedom itself. Sailing ships can take you to new destinations, they can bring you home, and they can allow you to chase – even accomplish – dreams! In some ways, a tall, 3-masted sailing ship makes an incredible metaphor for wealth, wealth planning, and the impact they can have on lives. Let’s weigh anchor and see.

Consider that a captain would look at a ship before setting out on a voyage, taking stock of what needs and planning for even unexpected situations. They would have a good idea of where they wanted to go, about how long it might take, and the general needs for provisions on the way. They would certainly understand the dangers of the voyage and make plans to mitigate them when possible. And they would also have a good idea on how to adjust to new realities once out to sea, to keep the ship moving in the right direction while keeping the crew safe, or how best to alter plans if necessary. In many ways, you can see how the whole idea of a sailing ship is like a wealth plan. The analogy is not perfect, but it does allow us to look deeply at one aspect of planning from a slightly different angle: What do we do when storms arise?

For investors, market volatility is inevitable. It is as inevitable as waves on the high seas. And yet, there are times when unusual volatility, or unexpected market downturns, rise up like massive storms to threaten our plans, threatening even to divert us to new destinations. Survival for sailing ships at sea in the midst of a terrible storm is not a sure thing: It requires a good, sound ship, and a wise captain. Conventional Hollywood wisdom tells us we must do two things in a storm: 1. Batten down the hatches. 2. Reduce sail to keep the masts from snapping or the sails from tearing. While these Hollywood idioms may be prudent, they do not tell us the whole story. All sailing ships require one thing for movement, steerage, and control: wind. All storms come with two major components: precipitation and wind. If a sailing ship is to survive a storm, it must be able to steer and move, as the most dangerous position for a ship in a storm is to be broadside to a wave. The full force of a 90-foot wave smashing into the side of a ship will inevitably roll it over and sink it. So a wise captain works to keep a ship from turning sidewise in a storm by steering and pointing his bow in the right direction. But that is not all. A wise captain cannot simply make do with bobbing along in the right direction. A wave crashing onto the stern (or poupe in French) of the ship, has a strong chance to swing the ship broadside to the next wave. In a storm, while battening down the hatches makes sense so that you do not take on additional unwanted water, reducing sail is a more delicate notion. When faced with the trauma of a storm, captains pack on sail, but not so much that the masts splinter and break from the strain. The reason is simple: Wind gives you speed to race with the waves, especially when on the crest of the wave. But ships can falter a bit and slow in the trough between waves when the wind is blocked by the mountain of water. So you need a lot of speed to maintain safety and steerage as the ship travels down between the waves before catching wind again on the other side. This is the key to surviving the storm: You do not reduce your sail to nothing. You pack on as much as is necessary to maintain speed and control.

Backing away from the dark, green skies of the South Atlantic storm for a second, let us think about portfolios and a question many clients have posed to me: What do we do if there is a recession? Really, at the heart of it, this question is about market volatility. What do we do if we face certain market declines? One of the realities is that economic recessions are surrounded by years of positive market behavior. Think of it like the waves in a storm. You have peaks surrounding the troughs and valleys. And like a ship on the high seas, portfolios can use these peak times to build up speed (i.e., larger portfolio balances) in preparation for the coming downturn. The freshest example (2025 tariff turmoil) makes the point. We saw incredibly strong returns in 2023 and 2024 leading up to a painful market correction in 2025. Investors that “packed on sail” to keep steerage during volatility saw the ability to pick up speed and avoid disaster as markets rebounded around April 9. But if an investor were to remove sail when they are in the storm, they risk losing steerage at a time when they can least afford it!

It is discipline in the face of danger that leads us through storms. And in market volatility, we see the opportunity to act with discipline for the sake of our plans and our portfolios. We make wealth plans to get us from where we are to where we are going. We make wealth plans to help accomplish our goals. Ultimately, wealth plans represent that same freedom that sailing ships offer: the chance to be able to live on our terms, to dream, to achieve. Just remember that sometimes we have to batten down the hatches and pack on some sail!