Those of you (my clients) who track your portfolios carefully know that, every day I’m able, I upload all of your daily portfolio transactions to Morningstar so that you can always know the composition, the value and the behavior of your portfolio across all of your accounts, wherever they may be. Of course, others just check on your portfolios when I send out quarterly performance reports, which may be much less stressful!
Anyway, the process of monitoring your portfolios every day gives me a feel for the markets, and, right now, I have this feeling that the equity markets are weakening. Most people would naturally ask me, “Then Dale, if you think stocks are going down, why don’t you sell? Why did you go back to full investment in your portfolio models last Monday?”
Ahhhh grasshoppa, I’m glad you asked 🙂
Firstly, I may be wrong in my perception of market weakness. Some development may cause stocks to leap up tomorrow. Secondly, even if I’m right, other assets, like bonds, gold, or real estate may rally commensurate with the drop in stocks. Thirdly, even if I’m right, I don’t know how far stocks will drop and when stocks will rebound. This type of market demonstrates the value of the methodology I’ve developed. We don’t try to make money making bets on our predictions of the future. That is a losing game (although many will claim they can see the future because of all their PhD’s when they ask for your money).
Instead, we will do the more difficult thing, and expect to be more profitable in the LONG RUN. We will stick to the proven plan.
Thanks for your trust,