As the history of the past 100 years confirms, it is not always smooth sailing for family investors. There are many periods of volatility, risk, turbulence, and negative market dynamics that can last for decades and severely damage or even destroy a family fortune. Navigating successfully through these particularly difficult years and carefully avoiding the heightened potential for loss during the worst of times can have an extraordinary impact on a family’s preservation of wealth.
It may be worth remembering again that Charles Darwin did not say “only the strong survive.” Instead, his true words were, “It is neither the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”
How families adapt their approach to the investment challenges may well make the difference between sustaining family wealth and stature, and falling prey to the all-too-frequent decline from riches to rags in three generations.
In periods of consistently adverse markets, it may be appropriate to adopt a different approach to investment in assets exposed to negative movements in the public or private capital markets.
When setting out on an investment voyage in stormy seas, wealthy families might benefit from an approach that adopts the relevant wisdom captured in the experience of sea captains whose vessels ...