Last night we had a fire call; someone was burning on their property which is OK for this time of year but the fire department needs to be notified.Three of us responded and we tried to tell the homeowner he needs to call in before he starts. This guy could not focus on the simple matter at hand he would just start talking on and on without focusing on the important thing; just saying that he would call in as asked.
As is often the case I see a parallel to portfolio management. Many investors get distracted by all sorts of things like hot stocks, trying to game a commodities market, making lopsided bets and other similar behavior.
When you flip on the TV, pick up a magazine or visit a web site a lot of the focus will be on something that probably does not really jibe with your long term needs.
Most of us just need to worry about having enough money when the time comes. If we can get from here to there without going on a white knuckle ride; all the better.
I concede it is easy to get distracted by a stock touted on Bulls & Bears with a compelling story that hits the right emotional spot for you. I know I am a sucker for a good story. I don't buy stories but they always sound great.
That being said most people will take an occasional flier. The other day T left a comment about devoting 25% to speculative plays. That is a little too high for the way I view the world but it is human nature to want to make a killing. Well OK but I would urge anyone before placing this type of trade to question if it really fits in with their financial plan and goals.
This idea will not be popular but this is how I see it.
Well the picture above has no coffee in it but I think it is pretty cool. We took it last summer in Reykjavik looking down an alley of sorts.
5 comments:
Capital preservation comes first.
Roger, or anyone else, I am seriously thinking about opening an e-trade account to access the new soon-to-be available global internet access to foreign markets. Any info on their service, fees, money management options (i.e., is there a savings or money market sweep account with a decent interest rate?), etc? Thanks in advance, J Carroll
Models this week:
Timing Model = 1.0
70% long, 30% cash
Global allocation of long positions
MSCI EAFE Index 30%
MCCI Emerging Markets Index 30%
Russell 3000 Index - U.S. 40%
Top Sectors
U.S. Basic Materials 4.0
U.S. Oil & Gas 4.0
U.S. Real Estate 4.0
U.S. Telecommunications 3.5
Mid Cap Value 3.5
U.S. Utilities 3.0
Precious Metals 2.5
Top Intl ETFs
MSCI Singapore Index Fund 3
FTSE/Xinhua China 25 Index Fund 3
MSCI Malaysia Index Fund 3
MSCI Mexico Index Fund 3
MSCI Germany Index Fund 3
S&P Latin America 40 Index Fund 2
MSCI Sweden Index Fund 2
MSCI Spain Index Fund 2
MSCI Brazil Index Fund 2
MSCI Pacific ex-Japan Index 2
MSCI South Africa Index Fund 2
MSCI Australia Index Fund 2
Top Regions, Styles, Asset Classes
MSCI Pacific Free ex-Japan Index 4.0
FTSE/Xinhua China 25 Index 3.0
Silver 3.0
Dow Jones Wilshire REIT index 2.0
S&P Latin America 40 Index 2.0
".......Most of us just need to worry about having enough money when the time comes. If we can get from here to there without going on a white knuckle ride; all the better......"
Agree completely with this line of thinking. CNBC, Bulls & Bears, Cramer, Smart Money, Barrons - all have to have info that sells. Having a diversified portfolio with some SHY, TIP, DVY, ETC., just doesn't pull in the #s for the advertisers.
My goal for '07 and forward is to not get suckered in for another biotech-cancer-curing stock! :)
Please permit two comment replies:
Regarding E-Trade, I did post recently that I use E-trade and find it to be an excellent trading platform and more. First rate in every respect, IMO.
Roger has further comented on the 25% speculative security percentage. I was the party who used the 25% Speculative Portfolio figure. My comment was intended to mean 25% of your securities portfolio(s). I have substantial real estate and separate Treasury accounts over and above any securities I own. Thus, my speculative securities in realty are about 5% of my total investments. That said, I do enjoy that percentage very much!
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