27 Mar

What it Means to be "Patient"


Adjective | pa ∙ tient | \'pā-shǝnt\

:able to remain calm and not become annoyed when waiting for a long time or when dealing with problems or difficult people

:done in a careful way over a long period of time without hurrying


Language is important. The words we use (or don't use) and their meaning have a direct impact on what is intended and understood. Language is a great medium when these two concepts are the same and causes issues when they are not. We are fairly certain that Federal Reserve Chair, Janet Yellen, is very aware of this characteristic of language.

We find it relevant (and mildly amusing) that the same word can have many different meanings and, depending on the audience, the communique can be interpreted differently.


Last week, the word "patient" was removed from the Fed's commentary with regards to raising short-term interest rates. The removal of "patient" signals that the committee may increase short-term rates as soon as June of this year. Beyond this one word, it appears clear that the Fed is in no hurry to raise rates and will want several key factors such as unemployment, to continue to move lower, inflation to trend higher, and the dollar to stop strengthening against other global currencies. Our expectation is that any interest rate move will come late in the year at the earliest, thus requiring additional patience from those who are concerned.

Those who should be concerned are investors with a time horizon that extends beyond a quarter or two. When rates do move higher, it will likely be by a token amount (+0.25%) but the impact could be significantly larger. The markets are likely to react with an increase in volatility in spite of the intended desire to minimize this affect.

Why is this so?

Many market participants lack sufficient patience to adapt strategies or allow investments to develop, grow and return real value to their stakeholders. When short-term is measured in minutes and hours and long-term, weeks and months, it is no wonder the markets react the way they do. It is nothing more than a reflection on the participants who interact with the marketplace itself.

Enduring investment disciplines require patience by both investors and managers of the capital in which they have been entrusted. It is our fear that too many companies manage to quarterly results fearing that their stakeholders will lose interest if long term objectives are not met in short time periods.

Our approach at EPIQ continues to focus on being aware of the changing environment while seeking the best of what is possible to meet our client's objectives. Often, this includes ownership in assets that are well capitalized and either grow thoughtfully or return capital in stable, meaningful ways. Getting paid to wait with interest payments, dividends and other distributions is a great way to achieve return objectives while assuming appropriate types of risk.

Whether your definition of patient is remaining calm and not becoming annoyed or doing something in a careful way, a goal of ours is to keep our clients from becoming the definition of patient when referred to as a noun: a person receiving or registered to receive medical treatment.

Thank you for taking the time to read this blog and please contact us to continue the conversation.


SAVE THE DATE: EPIQ Clambake - September 10th, 2015 - late afternoon



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EPIQ Partners is committed to building long-lasting relationships

Our managing partners believe client intimacy and professional advocacy are what makes this firm special and different from other investment firms. We bring a partnership approach to all of our relationships.

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