FAST FIVE: 10 Illustrated Truths About Investing & The Markets
Honestly, no one knows for sure where we are within the current cycle, but it is understood it will end.
As a portfolio manager, I must stay invested during rising markets as our clients need returns in order to meet their investment goals. However, I must also protect that capital from major drawdowns which inflict far greater damage to financial goals than temporary underperformance.
Pointing out risks, analyzing those risks, and developing an “odds based” approach based on those risks is what guides our asset protection strategies within our long-biased portfolios. While ignoring those risks may lead to great gains in the short-term, the long-term destruction of capital combined with lost time is irreparable.
It is our “homework” behind our investment management strategies. Here are ten thoughts about investing and markets to consider. (I have provided links to relevant articles for more in-depth explanations.) 1.
Diversification has become less beneficial as markets have become highly correlated.