Before You Panic
"Global Meltdown: Investors Are Dumping Nearly Everything"
So headlined CNBC's website and, no doubt, what they were reporting in real time as the market headed toward a close today. Even the gold bugs were paying the piper today as the world fled to U.S. Treasuries. Interestingly, the same talking heads who just a few months ago were exhorting investors to dump Treasuries are the same ones who are now touting them as the investment du jour! So, if we, our economy and our country is heading into the toilet, why are they investing in Treasuries?
Days such as today and weeks such as we've experienced -- particularly since the beginning of August -- are hardly fun to experience and live through as an investor. As Bill Clinton famously expressed: "I feel your pain." However, I've been through times like this before -- even for multiple years, on multiple occasions (one of the advantageous of age). It always looks the same -- as if the formerly comfortable world as we know it is coming to an end -- economically anyway.
Trust me, it isn't!
However, I understand that doesn't make it any less uncomfortable to live through. Investors, particularly those who are in a manic state or, as at present, panicking are usually the worst sources to rely upon. What they can be relied upon to do, as has been borne out by history on myriad occasions, is to buy at the top and sell out at the bottom. I am not saying that this is a bottom, but panicking and joining the lemmings all trying to get through the exits at the same time is hardly a rational course of action.
As Kipling famously wrote: "If you can keep your head when all about you are losing theirs...!"
Our investors should remember (and perhaps some of our other readers consider) that we are globally diversified in both equities and short to intermediate term (high quality) fixed income in over 12,000 different individual securities (in addition to any "alternatives" that may be owned). In order to lose it all would require a globally catastrophic event the likes of which we haven't ever seen -- including the crash of '29. Even then, an appropriately diversified portfolio, while certainly declining in value early on, didn't come close to losing it all. Moreover, the lesson to be learned was that staying the course and consistently rebalancing your portfolio, over the succeeding ten years, actually provided a handsome return to those who understood the difference between investing and speculating!
I don't mean to downplay current events and act as if they are inconsequential. Nevertheless, for those investing for more than a few weeks or even months, you should view the investment process (and I stress the word: "investment") as a lifelong exercise, requiring intelligence, knowledge, discipline, an historical perspective and last, but not least, wisdom will enable you to fully comprehend that this is just one of many bumps, to be experienced, along the way toward a long-term, successful investment experience.
If you're a long-term investor: ignore the media and the hyper talking heads. This too shall pass!
Days such as today and weeks such as we've experienced -- particularly since the beginning of August -- are hardly fun to experience and live through as an investor. As Bill Clinton famously expressed: "I feel your pain." However, I've been through times like this before -- even for multiple years, on multiple occasions (one of the advantageous of age). It always looks the same -- as if the formerly comfortable world as we know it is coming to an end -- economically anyway.
Trust me, it isn't!
However, I understand that doesn't make it any less uncomfortable to live through. Investors, particularly those who are in a manic state or, as at present, panicking are usually the worst sources to rely upon. What they can be relied upon to do, as has been borne out by history on myriad occasions, is to buy at the top and sell out at the bottom. I am not saying that this is a bottom, but panicking and joining the lemmings all trying to get through the exits at the same time is hardly a rational course of action.
As Kipling famously wrote: "If you can keep your head when all about you are losing theirs...!"
Our investors should remember (and perhaps some of our other readers consider) that we are globally diversified in both equities and short to intermediate term (high quality) fixed income in over 12,000 different individual securities (in addition to any "alternatives" that may be owned). In order to lose it all would require a globally catastrophic event the likes of which we haven't ever seen -- including the crash of '29. Even then, an appropriately diversified portfolio, while certainly declining in value early on, didn't come close to losing it all. Moreover, the lesson to be learned was that staying the course and consistently rebalancing your portfolio, over the succeeding ten years, actually provided a handsome return to those who understood the difference between investing and speculating!
I don't mean to downplay current events and act as if they are inconsequential. Nevertheless, for those investing for more than a few weeks or even months, you should view the investment process (and I stress the word: "investment") as a lifelong exercise, requiring intelligence, knowledge, discipline, an historical perspective and last, but not least, wisdom will enable you to fully comprehend that this is just one of many bumps, to be experienced, along the way toward a long-term, successful investment experience.
If you're a long-term investor: ignore the media and the hyper talking heads. This too shall pass!
"Global Meltdown: Investors Are Dumping Nearly Everything"
So headlined CNBC's website and, no doubt, what they were reporting in real time as the market headed toward a close today. Even the gold bugs were paying the piper today as the world fled to U.S. Treasuries. Interestingly, the same talking heads who just a few months ago were exhorting investors to dump Treasuries are the same ones who are now touting them as the investment du jour! So, if we, our economy and our country is heading into the toilet, why are they investing in Treasuries?
Days such as today and weeks such as we've experienced -- particularly since the beginning of August -- are hardly fun to experience and live through as an investor. As Bill Clinton famously expressed: "I feel your pain." However, I've been through times like this before -- even for multiple years, on multiple occasions (one of the advantageous of age). It always looks the same -- as if the formerly comfortable world as we know it is coming to an end -- economically anyway.
Trust me, it isn't!
However, I understand that doesn't make it any less uncomfortable to live through. Investors, particularly those who are in a manic state or, as at present, panicking are usually the worst sources to rely upon. What they can be relied upon to do, as has been borne out by history on myriad occasions, is to buy at the top and sell out at the bottom. I am not saying that this is a bottom, but panicking and joining the lemmings all trying to get through the exits at the same time is hardly a rational course of action.
As Kipling famously wrote: "If you can keep your head when all about you are losing theirs...!"
Our investors should remember (and perhaps some of our other readers consider) that we are globally diversified in both equities and short to intermediate term (high quality) fixed income in over 12,000 different individual securities (in addition to any "alternatives" that may be owned). In order to lose it all would require a globally catastrophic event the likes of which we haven't ever seen -- including the crash of '29. Even then, an appropriately diversified portfolio, while certainly declining in value early on, didn't come close to losing it all. Moreover, the lesson to be learned was that staying the course and consistently rebalancing your portfolio, over the succeeding ten years, actually provided a handsome return to those who understood the difference between investing and speculating!
I don't mean to downplay current events and act as if they are inconsequential. Nevertheless, for those investing for more than a few weeks or even months, you should view the investment process (and I stress the word: "investment") as a lifelong exercise, requiring intelligence, knowledge, discipline, an historical perspective and last, but not least, wisdom will enable you to fully comprehend that this is just one of many bumps, to be experienced, along the way toward a long-term, successful investment experience.
If you're a long-term investor: ignore the media and the hyper talking heads. This too shall pass!
Days such as today and weeks such as we've experienced -- particularly since the beginning of August -- are hardly fun to experience and live through as an investor. As Bill Clinton famously expressed: "I feel your pain." However, I've been through times like this before -- even for multiple years, on multiple occasions (one of the advantageous of age). It always looks the same -- as if the formerly comfortable world as we know it is coming to an end -- economically anyway.
Trust me, it isn't!
However, I understand that doesn't make it any less uncomfortable to live through. Investors, particularly those who are in a manic state or, as at present, panicking are usually the worst sources to rely upon. What they can be relied upon to do, as has been borne out by history on myriad occasions, is to buy at the top and sell out at the bottom. I am not saying that this is a bottom, but panicking and joining the lemmings all trying to get through the exits at the same time is hardly a rational course of action.
As Kipling famously wrote: "If you can keep your head when all about you are losing theirs...!"
Our investors should remember (and perhaps some of our other readers consider) that we are globally diversified in both equities and short to intermediate term (high quality) fixed income in over 12,000 different individual securities (in addition to any "alternatives" that may be owned). In order to lose it all would require a globally catastrophic event the likes of which we haven't ever seen -- including the crash of '29. Even then, an appropriately diversified portfolio, while certainly declining in value early on, didn't come close to losing it all. Moreover, the lesson to be learned was that staying the course and consistently rebalancing your portfolio, over the succeeding ten years, actually provided a handsome return to those who understood the difference between investing and speculating!
I don't mean to downplay current events and act as if they are inconsequential. Nevertheless, for those investing for more than a few weeks or even months, you should view the investment process (and I stress the word: "investment") as a lifelong exercise, requiring intelligence, knowledge, discipline, an historical perspective and last, but not least, wisdom will enable you to fully comprehend that this is just one of many bumps, to be experienced, along the way toward a long-term, successful investment experience.
If you're a long-term investor: ignore the media and the hyper talking heads. This too shall pass!
posted by The Investor Coach @ 2:24 PM
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