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Underperform/Outperform The investing performance facts are that most investment advisors, money managers, mutual funds, and hedge funds (with exponential increase in investment risk and, more often than not, no increase in investment performance), and almost all individual investors underperform most market indexes most of the time. Knowing that past performance is not an indicator of future investment results, most advisors, managers, and investors:
The opportunities for achieving investing performance excellence have never changed, will never change:
Financial Markets and Investment Prices There is no theory — modern or otherwise — that can be ordained, no computer that can be programmed, no software that can be designed, no investing tool that can be 'imagineered,' no technical analysis voodoo methodology that can be contrived, and no equation that can be divined to quantify, evaluate, and predict the primary forces that drive the sublime chaos of the financial markets and investment prices; human consensus, mood, and behavior; intelligent and not, knowledgeable and not, reasoned and not, rational and not, and logical and not. Modern Investing Tools If the techniques, tools, and theories surgeons trusted and used were of the same quality and integrity in their specific fields of medical expertise as those used by Wall Street, many investment firms, most investment advisors — and almost all individual investors who invest for themselves — in their respective circles of responsibilities, an Apple-A-Day would be a wonder drug, Ouija Boards and Crystal Balls would be considered advanced medical tools, and Voodoo, Séances, and Witchcraft would be Pulitzer Prize winning Modern Medical Theories. If surgeons were as undisciplined in their professions as Wall Street, many investment firms, and most investment advisors are in their respective areas of advertised expertise as they advise individual investors, a few lucky patients would succeed, most patients would have surgical complications, and, many, regrettably, would not survive. Investing Fools' Tools The myths of Modern Portfolio Theory, the Olestra™ of investing, and all of its illegitimate relatives have resulted in the creation of a new and popular set of mindless, imagineered investment disciplines that are nothing more than just other ways to record and illustrate investment history without valid analytical, interpretive, deductive, predictive, or directional investment value: Modern Portfolio Theory | Brinson's Asset Allocation | Beta | Monte Carlo Analysis | Efficient Frontier Analysis MPT Risk Management | Dull Sharpe Ratio | Pie Charts | Technical Analysis | Investment Planning Software The premise of Modern Portfolio Theory depends heavily on one's blind, unconditional acceptance of a grossly invalid assumption; if it happened yesterday or if it happened sometime in the past, then it will — probably, more likely than not — happen today or it will — probably, more likely than not — happen sometime in the future much in the same way that it did in the past. The errors in the reasoning and the math of Modern Portfolio Theory are the failure to distinguish between 'connected and causal' variable relationships and 'contrived and coincidental' variable relationships; the connected variables, for example, that must be in place to cause rain or the connected variables that must be in place to cause investment prices to rise such as fundamentals and earnings growth verses coincidental and contrived variable relationships; a change in the price of an investment and the change in the price of a related market index over a selected analysis range. Modern Portfolio Theory Modern Portfolio Theory, the Olestra™ of advising and investing, and all of its illegitimate relatives — Monte Carlo Analysis, Efficient Frontier Analysis, Beta, Brinson's Asset Allocation, Pie Charts, VaR, Sharpe Ratio, and a distant relative, Technical Analysis — using yesterday's news as an investment crutch — are just other ways to record and to illustrate investment/investing history without valid analytical, interpretive, deductive, predictive, or directional investment value because they assume and suggest, incorrectly, that the financial markets' cycles of the past and the valuations of underlying investments in the past — because they are somehow mysteriously connected as part of an orderly, sequential financial system — will repeat themselves similarly or exactly in the future as they did in the past in much the same order and with the same frequencies, durations, levels, relative valuations, and volatilities; suggesting, contrary to fact and law, that investing hindsight is, indeed, investing insight and investing foresight — absurd, as anyone who has spent more than a nanosecond in the financial markets would, should know. Explained another way, a thermometer measures temperatures in degrees as the weather changes. A thermometer is a recording device not a forecasting one; therefore, it cannot be used to predict future temperature levels:
Standard Deviation, Efficient Frontier, Beta, VaR, and Sharpe Ratio are much like a thermometer; merely means to measure past (contrived) relative investment performances between unconnected, coincidental, chance investment variables and neither the cause of nor the predictor of either. As one would have to analyze the weather-changing causal variables that affect weather, such as clouds, winds, moisture, humidity, and barometric pressure, to predict future temperature levels, the same holds true for historical Standard Deviation, Efficient Frontier, Beta, VaR, and Sharpe Ratio readings as a basis for predicting the investing future. Future investment values and associated investment/investing risks can only be meaningfully understood and predicted based on one’s correct understanding and interpretation of the fundamental performance changing causal investment performance variables that actually will affect an equity’s future behavior. Investment Selection and Portfolio Management Disciplines, Rules, and Procedures The mechanical aspects of investing — thoughtfully defining, relentlessly applying, and rigidly enforcing investment selection disciplines, rules, and procedures and portfolio design, management, processing, and performance disciplines, rules, and procedures — are as important and as powerful in determining investing performance outcomes as are investment selection insight, inspiration, vision, and timing. They are the 'fail-safe,' disciplined investment selection and portfolio management controls to maximize the effects of good, well timed investing insight, inspiration, and vision and to minimize the impact of failed or poorly timed investing insight, inspiration, and vision; to take advantage of changes in the financial markets rather than to be the possible victim of changes in the financial markets; can't get into investing trouble. Regrettably, they are the critical but weakest or completely missing investing performance links for most investment advisors and almost all individual investors who invest for themselves; whim, mood, fancy, fear, and greed often seem to rule the day. Investment Plans Most standard investment plans — presented in the eye-catching wizardry of colorful pie chart, graph, and historical investment performance data-dump infested reports — offer considerable information about what investors already know about themselves and general theoretical information about the basis, the form, and the design of the investment plan; but, little about the details of the 'frame' and the 'structure' that will give an investor an investing direction and really nothing about the 'engine' that will actually drive the investor to his or her investing performance destination; the 'when, why, how, and what ifs' of investing over time. The appeal of these types of investment plans are that neither investing judgment nor investment selection and portfolio management skills are required; just search historical investment databases based on past investment performance, retrieve investments based on past investment performance, sort investments based on past investment performance, pick investments based on past investment performance and then view, print, and present and then hope that the investing past will somehow be the investing future. Monthly Statements and Investment Portfolios Monthly statements and investment portfolios most often look much like the 'Winchester Mystery House' without consistency, discipline, direction, continuity, control, or theme; neither structurally sound nor competitive. Investments, Strategies, and Tools There are many types of investments, investment strategies, and investment tools that are profoundly flawed, fictitious, treacherous, and often predatory. Economic Opinion All economic opinion and market forecasting will range from terrible, to close, to a few lucky calls. The First Principle of Investing The first principle of investing is do no harm; don't make major mistakes while in the pursuit of competitive investment returns. Performance All investors are exposed to advertisements, articles, CDs, Websites, and seminars that use single investment incidences and exceptions to project incredible investment returns. Keep in mind that those who even suggest or possibly promise annual investment returns of 100%, 50%, and 30% cannot deliver. If the higher ranges of these investment rates of return were possible to achieve on a consistent basis and if an investor started with just $10,000.00, a quick compound capital growth calculation would show that it would not be too long before that investor would have just about all of the money in the world. Since these returns are commonly suggested to be in the realm of possibility, the purveyors, or should I say predators, of these investment returns should not have to be promoting their investment scams, each should have about all of the money in the world by now, and there would not be any money left for either you or for me. That said, back here on planet earth a $40.00 equity just going to $43.00 in a year equals a 7.5% return on capital, a $30.00 equity just going to $33.00 in a year generates a 10% return on capital, or a $20.00 equity just going to $22.00 in a year and declaring a $1.00 dividend is a 15% return on capital; realistic investment return expectations for an investor seeking primarily capital growth and willing to assume moderate investment risk with occasional variances above and below these investment returns in extreme and unusual investment circumstances — best of all, as an investment advisor, you can deliver. Modern Investing Math Mystique There is an ever increasing and unexplainable modern investing math mystique investing equation phenomenon; if what seems to be or is defined to be a cause and effect occurrence expressed as a mathematical equation, the equation is assumed to be, must be valid, universally true, and has unique predictive powers. 'Einstein's theory of relativity seems to be valid:'
'Certainly
If
Well, it doesn't.
Regrettably, mathematicians concluded that since Einstein's simple math works in the universe to explain current natural phenomena and to predict future relationships and events, it most certainly will work in the sublime chaos of the financial markets. A few Albert Einstein mathematician wantabes, while ignoring the obvious structural and causality differences between the universe of nature and the universe of the financial markets, extracted the laws and concepts of Einstein's universe, so to speak, and attempted to superimpose them, in effect, onto the world of investing by confusing, comparing, and applying the concepts of immutable order, structure, relationships, causes, connections, correlations, effects, and rules (Newton's three Laws of Motion, for example) as found in the sciences and systems of the universe — and as explained with mathematics — with the chaos, incidences, coincidences, chances, correlations (none of which are causal; but, assumed in order to make Modern Portfolio Theory math work) and no rules as found in the artistry and complexity of investing and managing capital in the financial markets in an effort to predict investment outcomes; the ultimate 'non sequitur' of investing. The popularity of modern investing math can be explained by the facts that no investment advising or investing skills, insight, or foresight are required — just define, retrieve, sort, select, present, buy, and hope that the investing past will somehow be the investing future — and the investing naive and unsuspecting are easily mesmerized by and respond to the apparent wizardry of the pie charts, graphs, and data dumps that modern investing math can generate. Investing Technical Analysis Investing technical analysis — worth a glance — is more a self-fulfilling trading style than a legitimate, independent means to predict future price behavior of an equity in that its own universal rules and its own phalanx of followers become the value by making the rules, following them, and, thus, occasionally, again because of the number of chartists checked in that day, possibly having a small contrived impact on creating the results in conjunction with the more substantive stock market price affecting variables; current market conditions, the market outlook, relative investment values, investors, fundamentals, etc. It would seem technical followers, chartists, are participating in a game where the number of players following the rules and the amount of dollars they have will determine the outcome. Every technical rule has an exception and every exception has a rule. Nothing is tied to what the company is doing fundamentally other than being a possible reflection of it. As a chartist you are simply hoping that enough members of the technical analysis club have paid their dues, are members in good standing, and that they will believe what they see, according to club rules, and that they will simply take the correct technical buying and selling action along with the rest of the herd. Think about this: A line is a line is a line. There are many bits of data that make up the dots on a line. You can do a lot with a line made up by data dots; square it, divide it, multiply it, average it, square root it, time or volume weight it, intercept or triangulate it with lines that are iterations of the primary line; but, you cannot determine or predict where the next data dot will be on the line because of the position or value of the prior data dots that make up the original line anymore than any data dots that came before the latest new data dot could have been predicted by the data dots that came before them; other than, as stated earlier, to the extent that others are looking at the same line as you are and are using the same artificial rules that you are to divine where the next dot will appear:
Step 1: Reflects the closing price of a stock on its first day of trading based on the net pluses and minuses of stock market price affecting variables. Step 2: Illustrates two days' closing prices with day two's closing price being determined by stock market price affecting variables and not because of the position of the first day's price data dot. Step 3: There is no basis whatsoever to suggest that the price of a stock will close @ A, B, or C on the third day based on the position of the prior two days' closing prices; the fatally flawed leap of faith assumption that technical analysis would have you accept. Technical analysis also mistakenly makes much of the reflective not predicative relationship between a stock's daily price and any one of a number of moving averages, 20 Day Moving Average illustrated below, for example:
Daily Prices and a 20 Day Moving Average of those prices are nothing more than mathematically connected by the algorithm used to calculate a 20 Day Moving Average generated by, a function of Daily Prices To suggest that a day's future stock price will behave in a particular way because of its relationship to its moving average — which is simply a different 'view' of itself — is absurd. Stock prices and moving averages are simply ways to record trends; but, neither predicts trends. Short-Term vs. Long-Term Investor Historically, the terms Short-term, Long-term Investor have been used to differentiate investors' tendencies towards/preferences for the lengths of investment holding periods; the assumption being that short-term investing is more speculative and more for the gambler while long-term investing is more prudent and more for the conservative investor. The implications and conclusions of these two investing strategies are that the holding period of an investment is a primary determinant of investment performance and, therefore, justifies ignoring both short and long-term investment outcome determinant considerations and variables.
Undisciplined and unskilled investment advisors and investor's, especially long-term investors, often use long-term as an excuse for ignoring current investment realities and for not making necessary short-term investment decisions — I can make a reasoned decision to buy based on current and projected investment value and market conditions; but, I refuse to make a reasoned decision to sell based on current and projected investment value and market conditions.' Categorizing investors in this manner can only obstruct investment performance as the investment holding period is being determined, incorrectly, by the profile of the investor rather than being determined, correctly, by the short and long-term behaviors of the financial markets and underlying investments. The results of using such an investment strategy are that it can box an investor into an inescapable corner which can only lead to absurd and, very often, very expensive investment conclusions; such as, the opportunity for a realized short-term gain of 25% is inconsistent with a long-term investor investment profile and, therefore, cannot be taken. Or, another example, the erosion of capital in the short-term can be ignored because it will somehow take care of itself in the long term. The fundamentals and performance of an investment, moving from short term to long term, should determine investment holding periods rather than the investor's investment profile which has nothing to do with the investment value of and investment timing for an investment. If the reasons, expectations, and apparent timing, present at the time of purchase, have diminished significantly or have disappeared altogether, the logic of selling is the same now as was the logic for buying in the past. Wrong All investment advisors and investors must accept, understand, and agree that, on occasion, they will be both right and wrong because investing has being right and wrong built into it.
Investing Performance Obstacles The five greatest obstacles to investing performance:
Investment Advisor Questions All investment advisors must first ask themselves the following questions in order to evaluate their investment advising value added to the investing performance excellence equation:
Price, Fundamentals, and Value Though price, fundamentals, and value are seldom aligned — with one or two variables being ahead of or behind the other(s) most of the time — fundamentals and value will always ultimately be reflected in price at some point in time; however, the difficulty being that no one knows when, to what extent, or for how long. Therefore, it is imperative that one have a dynamic, forward-looking investing style and proven investing strategies in place to help one evaluate the relative actual and projected alignments of price, fundamentals, and value in an effort to buy the best for the best at the best time and to sell the best for the best at the best time.
Investment Timing Investing is more about timing, markets and individual investments, than any other investment selection consideration because it is the primary determinant of investing success. Those who suggest that investment timing is not possible are the masses of undisciplined investment advising and investing weak who have given little substantive or procedural thought about when to buy or when to sell, who are unwilling to accept all of the responsibilities of advising and investing, who are willing to accept being average, and who are unwilling to accept that they can make an investment mistake—as they watch their investments plummet—while seeking solace by stating that statistics have determined that investment timing cannot be done in order to avoid having to make an investment timing decision as to when to buy or when to sell an investment. Remember, the greatest perk of the financial markets is liquidity — the best of the 'investment timing tools' of the financial markets; the ability to buy and to sell in moments; patience, price trends, market trends, company growth and profits, and economic cycles being the other investment timing tools. Liquidity enables investors to 'time' the markets because they can buy and sell at any time as they try to take action at the best time to minimize the impact of timing mistakes and to try again when the time seems better. The results, more often than not, will be doing better than the stubborn investor ('I've got to save that commission; so, I'll put 99% of my capital at extreme risk so as not to have any risk that I will have to pay a 1% commission.') who does not try to time the markets and who sticks with his/her initial investment decision—regardless of the fact that the reasons for making the investment in the first place have changed—with the long-term hope that time will somehow come to the rescue and bail him/her out; which may or may not ever happen.
Almost all investment advisors, stockbrokers, and individual investors are completely out of control with regard to price management. After carefully selecting investments and after executing the trades, almost all investment advisors, stockbrokers, and individual investors are generally very much adrift and very undisciplined. The single most important decision that all investment advisors and all individual investors must make after a position(s) is established—buying, accumulating, dollar-cost-averaging—is the price at which an investment(s) will be sold should the price begin to decline; no exceptions:
Do not fall back on or depend on any one or all of the five greatest obstacles to investing performance when things go wrong to rationalize doing nothing; 'It'll come back,' 'It's not a loss until it's sold,' 'The charts indicate...,' 'The analyst said...,' and, my favorite, the one that causes the most damage most of the time, 'I'm a 'long-term investor (who will make a reasoned decision to buy based on current and projected investment value and market conditions; but, will refuse to make a reasoned decision to sell based on current and projected investment value and market conditions).' Take advantage of the greatest perks of the financial markets, liquidity, price alerts, and stop orders. When a price alert is hit (5%, 10%, 15%, all manageable), let the market decide for you what to do and do what the market is telling you to do:
Investment Advisors Past Performance Investment advisors announce the required, responsible, and absolutely true investing footnote, "Past performance is not a guarantee of, …is not necessarily indicative of, …is not a true indicator of future investment results," and then proceed to use past performance as the primary basis for making investment recommendations and projecting future investment results Investment Advisors Investment Advisors have generally devolved from being fiercely independent, self reliant, skilled investment advising practitioners to being investment advising generalists who are merely superficially and conversationally competent in many wealth management related issues and masters of none; trained to focus more on the marketing, gathering, and moving of capital than on the advising, building, and protecting of capital — products and transactions rather than portfolios and processes. Extinction of the noble and important profession of investment advising, as we know it, is a distinct possibility because all markets eventually close, are closing the inefficiency gaps between value and price, competent and unqualified, skilled and unskilled, serving and self-serving, and, most of all, good investment advising judgment and management skills and bad investment advising judgment and management skills. The leading indicator of this increasing and expanding trend towards extinction is the exodus of investors from traditional sources of investment advice to the ever expanding 'investment advising' Internet where, at worst, they will find for free what investment advisors offer for fees and commissions as they seek what is so rare, very hard to find, and priceless; mature investing judgment, sound investment advice, and disciplined investment management. To Rebalance Or Not To Rebalance Investment Portfolios Should Never Be In Question There are many investment and portfolio management disciplines, rules, and procedures — allocate, rebalance, and reallocate investment portfolios to name three — that will always improve the 'odds' of meeting the primary objectives of investing; to build and to protect investment capital, to take advantage of changes rather than to be the possible victim of changes in the financial markets and in investment values. Rebalancing investment portfolios is intended to maintain the initial structural integrity of an investment portfolio and to restore the initial allocation of investment capital consistent with an investor's investment profile; risk tolerances, income/capital growth objectives, and investing time horizon. It must be presumed that initial/original allocation of capital to different investment sectors, investment categories, investment types, and specific underlying investments was based on an investor's investment profile at the time the investment portfolio was created — risk tolerances, income capital growth objectives, and investing time horizon — and the current market conditions, the market outlook, and relative investment values. The broad question of whether to rebalance investment portfolios can first be answered by asking a general portfolio rebalancing question: 'If an investor had cash today, would the current now 'unbalanced' portfolio be the initial allocation of capital today that would match the investor's investment profile in the same way the initial allocation of capital was consistent with the investor's investing profile?" To the extent and when an investment portfolio is not, the investment portfolio must be rebalanced:
There is an additional reason for and advantage of rebalancing of an investment portfolio that falls under the mechanics of investing; rebalancing of a portfolio will lead to more efficient accumulation of investments. Rebalancing investment portfolios forces, in effect, the process of continuously 'buying low and selling high' as investment sectors, investment categories, investment types, and specific investments within investment portfolios become relatively overvalued and undervalued as investment prices oscillate/crisscross over the short term, shorter term. Oversimplifying, initial conservative investor weightings of 50% A and 50% B (investment sectors, investment categories, investment types, and/or specific investments) changes to 25% A/75% B weightings due to price/valuation changes and now match an aggressive investor's investment profile.
Hold A and B, like them both, and want to continue to hold them both: Start:
A goes to $15.00 and B falls to $18.00 a share as part of the day-to-day, normal, and typical independent fluctuations of both A and B as the financial markets change.
Rebalance back to 50%/50%; $12,000.00 each; - $3,000.00, + $3,000.00.
A falls to $12.00 and B goes to $21.00 as part of the day to day, normal, and typical independent fluctuations of both A and B as the financial markets change.
Rebalance back to 50%/50%; $11,835.00 each; + $2,235.00, - $2,235.00.
Rebalance Market Value: $11,835.00 + $11,835.00 = $23,670.00. Buy, Hold, and Forget Market Value: [1,000 A @ $12.00 = $12,000] + [500 B @ $21.00 = $10,500.00] = $22,500.00. Rebalance Variance: + $1,170.00. Investing Vocabulary If
the following are any part of your investment advising or investing vocabulary
the terms, though you are not looking for it, will probably lead you into investing
trouble:
Tempting, But Don't
Investment Advisors Performance Oxymoron Many investment advisors have succumbed to the latest inane investment advising wisdom of the day; passive 'buy, hold, and forget,' untimed, unmanaged index funds, exchange traded funds investing — unknowledgeable, unskilled, undisciplined, unmanaged, untimed investing, an investing performance oxymoron: The conventional and (un)inspired investment advising and investing wisdom of the day is to have investment advisors and investors, in effect, concede that neither one of them has the management skills nor the qualifications to manage investments and time investing and that, therefore, the best solution is that investors should buy unmanaged investments to eliminate investment management and timing; great concept, take all of your hard earned capital and invest it for the future without management or timing. Imagine going to Warren Buffett and suggesting to him that to improve investment performance he should no longer manage or time his investments, that, instead, he should invest in index funds in which the best he could do would be to be average—striking out, bunting, and hitting singles most of the time while never really having the opportunity to hit doubles, triples, and an occasional home run—and, worst of all, while actually assuming greater investing risks, not less, than most other investments because index funds are missing the two critical investment performance components that really matter, that actually determine investing outcomes; investment management and investment timing.
Adopting this investing strategy is tacit admission to clients that the investment advisor is unknowledgeable, unskilled, and undisciplined, that the investment advisor can't do what he/she was hired to do — bring value added to the investing performance equation — and that he/she will most likely underperform.
Individual Investors Adrift Individual investors are often exposed to "hit and run" investment advice, being "sold" random, isolated, sometimes frequent transactions with no clear investing goal in mind — adrift, results more by chance than by design. Individual Investors Unsatisfied Individual investors may not be satisfied or successful while investing because they may not deserve to be satisfied or successful based on the way they manage the business, their business, of seeking investment advice from others or personally investing their capital in the financial markets. Investors' failure to perform occurs because:
Investors must do the planning and the work that is necessary to prosper in the financial markets and must be willing to learn or do what they need to learn and do in order to evaluate and select investments, investment advice, and investment portfolios; to either manage their own capital or to make informed decisions when they delegate investment planning and investing to an investment advisor. Wall Street Core investments include bonds, equities, traditional mutual funds, commodities, coins, precious metals, real estate, and private businesses. When these investments are 'packaged' into 'new and improved' investments or 'unpackaged' as derivatives by Wall Street's marketing 'imagineers' to contrive and fabricate entirely new classes of turbocharged toxic investments linked to high fee investing strategies, the value added most often accrues directly and immediately to investment firms and investment advisors in the form of increased revenues for the former and increased commissions for the later; but, without adding substantive investment value for investors at any time while, in most cases, masking added investment risk. Investment advisors and investors need to understand that better and safer investing will not be found in 'new and improved' investment products but in proven investment advising and investing skills, investing strategies, and investment capital management disciplines. The notion that an investment is safer and that an investor is more secure by investing in index funds, for example, than in individual equities does not follow; both can go up and both can go down—a little or a lot, for a short time or for a long time. Investment safety and investor security fall squarely and directly into the lap of the investment advisor or investing decision maker. The degree of investment safety will be determined by the levels of investing investment selection and management skills of the investment advisor or, the investing decision maker and the quality and the integrity of a forward-looking investing plan and path.
Investment Analysts For every investment there is a respected analyst with a buy recommendation and an analyst with a sell recommendation. The facts are that each will be, with rare exception, correct less than 50% of the time. Investment analyst gain their 'expert' reputations through the 'argument by exception' which suggests that the exception is represented as the rule; make ten recommendations, one works out, tout investment selection skills based on the exception without mention of the 'actual' rule; one out of ten. Investing Performance Excellence Investment advisors, stockbrokers, and individual investors continuously seek the nonexistent wellhead of the 'fountain of perfect investment recommendations, investing strategies, and, investment timing sources' in the mistaken belief that 'best' investing performance can only come from better investment ideas while being unwilling to acknowledge the fact that they themselves are most often the weakest investing performance cog. In reality, all investment advisors, stockbrokers, investment analysts, investment research firms, and individual investors who manage their own capital are always closer to random investment selection than they think they are, than they are willing to admit. Whether doing one's investment selection due diligence or whether selecting investments at random, the results from both investment selection methodologies — careful investment selection and random investment selection — will be about the same most of the time; both generating good and bad investment selections and both yielding similar investment selection performance distributions; some up and some down; most a little, some quite a bit, and a few a lot; the problems, of course, being not knowing in advance what each investment will do; what direction, when, how far, and for how long.
The following investment portfolio (one of an infinite number of possible investment portfolio holding examples) was created by one of the best and brightest investing minds:
Without questioning what was selected and the due diligence applied in and the attention given to the investment selection process, it is clear that 'some up and some down; most a little, some quite a bit, and a few a lot is an investment selection and investing performance reality. It is clear that investing performance excellence will be determined at least as much by what you do with investments, how you well you manage investments after you own them as by what investments you buy:
Investment Advising Goal Be better managers. Build a personal, proprietary investment advising net worth; feel better, do better, and beat the competition: Create an organized, efficient, and disciplined investment advising and investing environment in which each investor, regardless of investment need, knowledge, experience, and the amount of investment capital, will be honorably, properly, intelligently, and efficiently served consistent with each investor's investment profile and investment goals, the current market conditions, and the market outlook; nothing learned the hard way, do it right the first time, suitable, hopefully timely investments, structurally sound and competitive investment portfolios, full disclosure, and investor informed, economic best interests investing with specifics and in detail. Individual bonds, equities, and traditional value mutual funds wrapped in a disciplined portfolio creation and management environment; the most efficient use of capital — direct and undiluted participation in investment opportunities, lower investment risk because free from flawed packaged investments and predatory investing strategies, and little or no fees and commissions constantly leaching from capital. Rather than attempting to predict the short-term oscillations of the markets and investment prices — something no one can do on a consistent basis — control what can be controlled — judgment, skills, and strategies — to take control of and to take advantage of the uncontrollable and unpredictable; the markets and investment prices. Build an investment advising and management model that does not depend (entirely) on the correct prediction of the direction of the markets and individual investments (both always help), but more on a business model that anticipates change and the certainty of the need to change.
Create an almost perfect investment advising and investing environment. Use the best of both worlds; a lot of the old school and a little of the new: The old:
The new:
Investing Performance Excellence The investing and investment performance critical path conclusions are as clear and inescapable as are any other investing and investment performance priorities indefensible. The centerpiece of one's investment advising and investing performance skills must be to build and to protect investors' investment capital by first creating unique, structurally sound investment portfolios that match suitable, hopefully timely investment sectors, investment categories, and individual, underlying investments with different investor investment profiles — different investor investment risk tolerances, different income and capital growth objectives, and different time horizons — and then to keep investment portfolios competitive by managing, modifying, monitoring, and measuring investment portfolios — one at a time, a few at a time, or all portfolios all at once — as investors' investment profiles, the current market conditions, the market outlook, and relative investment values change as part of the ongoing decision making, action taking investment advising and investment management, and investing performance processes:
Disciplines, Rules, and Procedures To prosper, investment advisors must piece the investment advising, investing, and investing performance puzzle together by first developing a unique proprietary investment advising value; your own prospectus; who you are, what you represent, what you will and will not do, and how you conduct your business; why, when, how, and what if — Investment Selection, Disciplines, Rules, and Procedures, Portfolio Management Disciplines, Rules, and Procedures:
mhj3.com Money Management Plan
Investing Tools For All Seasons Use investing performance software tools to help you drill down to investment selection and management, portfolio management, and investing performance bedrock: Investor's CalcStation Investor's CalcStation Personal Budget/Balance Sheet/ Investment Planning; define, modify, and manage the savings and investing tasks at hand; a walk in the park, just a bump in the road, or climb Mt. Everest — investor's current and projected Budgets (Income - Expenses), Assets, Liabilities, Personal Cash Flows, Balance Sheets, and Net Worth Investment Goal Analyses over user selected analysis ranges by:
Investor's WorkStation Investor's WorkStation Portfolio Design, Management, Modification; create, manage, modify, monitor, maintain and measure unique, structurally sound and competitive investment as investor investment profiles, current market conditions, the market outlook, and relative investment values change:
PerfCalc PerfCalc GIPS Compliant Portfolio Performance Calculator; Modified Dietz, Large Cash Flows Geometric Linking, and Daily Valuation investment portfolio performance calculation methodologies. You will never look back. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
is valid and reflective of actual cause and effect variable relationships and
is, therefore, predictive of behaviors in the universe, then surely the latest
iteration of the Beta risk measurement equation below — much more complex,
with many more variables than Einstein's equation — most certainly, must
be, just has to be valid.'
Price
Management
