Volatility is not a threat
At Westwick Melrose & Cromwell, we often find ourselves amused by the loud warnings suggesting that family offices need to prepare for market volatility. The reality is that most families are largely immune to such volatility.
Volatility is a concept that primarily concerns institutional investors or anyone who operates on a mark-to-market basis. However, families do not adhere to this paradigm. To simplify, the price of an asset only becomes relevant when there is a need for cash, and families seldom find themselves in such a position.
When markets are on the decline, the strategy is often to be on the buying side rather than the selling side. Conversely, when markets are rising, it might be an opportune time to consider offloading assets. Yet, in both scenarios, the decision may very well be to do nothing at all.
In the realm of family offices, volatility is viewed not as an enemy, but as a friend.