Every New Year, every new
calendar quarter in fact, brings a heightened sense of anticipation about
market performance. In its proper
perspective, we have a unique demarcation that allows us both to look back and
to look forward. Whether we are “licking
our wounds” from a beating we took previously, or rebalancing our assets and
expectations for future success, investing is by its nature a regenerative
endeavor, always filled with hope.
That is why I find it almost
comical that day-traders, hedge fund managers and alternative strategists
calibrate their successes, or failures, by the minute, day, or month. That type of mad money investing is a parody
of itself, a cliché of the meaning of investing. For most of us, asset allocation, portfolio
management and market research are glacial undertakings, whose success might be
quantified by double-digit integers, but whose time-line could be inter-generational. Indeed, to build a level of confidence,
trust, and execution of a client’s objectives, a longer period of evaluation is
a prerequisite.
Fast money my a--!!
The casual observer or
participant in the financial markets gets excited by daily sidebars and
exogenous events he sees on the local news or network business
programming. They become exorcized by
the excitement of anything that appears to generate movement. They disparage inaction as being
ineffective. They also compare
“slow-moving” unfavorably to “fast-paced.”
I have no problem specifically
with anyone of these persons.
But, clearly, they don’t
populate the world of high-net-worth, transgenerational money management that I
and many of my colleagues do.
They are entitled to their
fun. But like the tortoise and the hare,
their actions are sometimes antithetical to their objectives. Sometimes, their efforts can be harmful not
only to themselves but to the markets at-large.
It’s about consistency.
Professional investment
advisors understand the essence of solid due-diligence, research and scientific
method. They appreciate the tectonic
pace of their craft, and hope to gather no more than their share of
coincidental movements within the market.
Rather than aspiring to that
first 3/8ths of a securities movement, our hope is to frame the proper asset
allocation so as to capture (overweight) the prevailing trend while
underweighting the risks inherent overall.
It becomes a 3 year horizon; 15 year horizon; 30 year horizon or more;
not a 3 minute, 15 hour, or 30 day one.
Likewise, we don’t have to get
caught up with the angst of getting a hit, or striking out each time we
allocate investment funds. Our true
value is the net long-term accretion of a client’s net-worth, not the cocktail
party style trade-du-jour. Our lives, and those of our clients, are not
defined by little doses of adrenaline.
We simply persist, sometimes under the radar, to live another day and to
perfect our methodology.
Some might see these thoughts
as antiquated, not in keeping with our technological times. I’ll put my track record and methodology
against anybody, and have for decades, and more often than not usually win
without the hoopla or fuss that most casual enthusiasts seek.
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