Falling Knives

Falling Knives

March 15, 2022

In high school, I used to work at a local restaurant washing dishes, bussing tables, and cooking food. It was a typical high school job and I worked with many people that were around my age. Oftentimes, I was one of the last people at the restaurant long after the last customer had left. On one such occasion, a coworker and I were wrapping up the remaining dishes and mopping the floors before heading home. As my coworker began loading one of the last remaining loads of silverware into the dishwasher, disaster struck. I am not exactly sure what happened but somehow he tipped over the organizer holding the silverware and it unceremoniously clattered to the floor. At first, I thought nothing of it, that is, until I saw the look on his face. His face had gone white and he was clutching his hand with a rag. In a valiant effort to stop the cutlery from hitting the yet un-mopped floor, he had only managed to slow the trajectory of a falling steak knife. In other words, he suffered a bad cut on the palm of his hand (I believe that he ended up needing stiches). I remember one of my managers at the time exclaiming, “don’t you know to never try to catch a falling knife?!”

I don’t tell this story to shame my former colleague for a mistake that he made in his youth. In fact, I am not sure that I would have acted any differently. Instinctively, he acted to save the used utensils just as I am sure many of us would in the same situation. Without thinking, he reached forward in an effort to stop a mistake that would only lengthen the amount of time until he could return home. Who could possibly blame him? My manager’s comment had the appearance of wisdom but was both too late to prevent, and benefited from, the evidence of my coworkers now bloodied hand. The truth is that his comment only exasperated an already tense situation.

In a world in turmoil, it can often feel as though everything is about to collapse in a noisy heap. Instinctively, we might try everything in our power to avoid financial and emotional pain. Big red words on the TV inform us that everything is going wrong and we need to get out now before it is too late! As a financial advisor, I agree with only two words of that statement: “too late”. Once the knives are falling, it is already too late to try to catch them. My friend at the restaurant learned this the hard way. These knives have names like, “War in Ukraine”, “Inflation”, and “Supply Chain Issues”. These are all severe issues and I do not mean to discount them in any way. However, most people will not be agile enough to catch them before they hit the ground. The attempt is likely to cause more damage than if you had done nothing at all. “But Alex!” you say, “Think of the havoc these events could wreak on my portfolio. Are you really saying that I should just let it happen?” The answer to this question is not always a yes or no answer. Hopefully, we would have already done something to mitigate these events long before they ever happened. However, for the purposes of this blog post my answer is an emphatic, “Yes, that is exactly what I am saying”. The immediate consequences of doing nothing may be swift and painful. They may even change your plans and impede your progress for a time. However, they are nothing compared to the pain inflicted by trying to catch the knife on its descent to the floor. In the days and weeks to come, it will almost certainly be painful to watch your portfolio react to the events of the world. Years from now, this will likely only be a blip on the radar. My advice to you is the same that it would have been to my friend had I the benefit of knowing what was to come: Let the knives hit the floor.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual