It's Out There: What's Gonna Happen Next?
Recent communications I've received from various sources have
convinced me that the "feeling" of "What's gonna happen next" is alive
and well - although I'm not sure "well" really captures the feeling. So
palpable were the emotions underlying the comments, I thought we could
touch on the subject as we start what - according to these individuals -
may be the beginning of the end, or something close to it.
If we check into market activity since the start of the year - months before the "correction" (really a crash) in August, you'd find that just about everything has proven to be dwindling source of profits for the inveterate practitioner of "diversification." Without getting into just what "diversification" means here (lots of stocks, stocks and bonds, stocks, bonds, and cash, stock, bonds, cash and...whatever), the fact is everything has gone down, albeit not by too much. Stocks may have been the bad boys lately, but other assets designed to provide "non-correlated" activity haven't really done their job that well. Not that some degree of balance hasn't been a good idea. It has. But one would have expected something - anything - to have picked up the ball and exhibited enough gumption to raise your portfolio at least a bit above zero. Unless you lucked out by timing or some brilliant combination that has escaped most of us, that's likely not the case.
So here we sit on this Monday of the second full week of September, weakened and slightly bloody, looking to the future. Will the "feelings" of impending doom, or even the predictions of severe reversals in September of October come true? Ah, my friend, that really is the question of the moment. Ideally, you're sitting with holdings that will weather "whatever." Do yourself a favor and look them over carefully. What will happen to you if one (or more) of them fall, let's say, 50%? Will it change your life. If not, relax. Oh, but you'd still not be happy about it? Then make some changes until you're positioned such that your happiness is assured.
Can't think of any changes you can make to assure your happiness? Then try one or both of these:
First, sell everything and go to cash. Of course, if your investments are all "taxable" in nature, you may generate gains and owe taxes in April 2016. But you can calculate that and decide if it's worth it. You'll also face the dilemma of when to re-invest, which really isn't something you can just push aside. Sticking with cash for too long will find you ultimately in a poorer condition, even without having lost any "principle" due to the erosion of the value of your US dollars (regardless of all the talk about how "inflation is low").
Second, you might face the fact that happiness - for the most part - really isn't a function of the numbers on your brokerage statement. And if it is, you may want to re-think your entire approach to life while there's still time.
Although #2 will likely be more than you want to address here of a Monday morn, it may be something to tackle sometime soon. As for #1, just do it now and stop worrying.
Easier said than done. Believe me, I know.
And to my Jewish friends:
If we check into market activity since the start of the year - months before the "correction" (really a crash) in August, you'd find that just about everything has proven to be dwindling source of profits for the inveterate practitioner of "diversification." Without getting into just what "diversification" means here (lots of stocks, stocks and bonds, stocks, bonds, and cash, stock, bonds, cash and...whatever), the fact is everything has gone down, albeit not by too much. Stocks may have been the bad boys lately, but other assets designed to provide "non-correlated" activity haven't really done their job that well. Not that some degree of balance hasn't been a good idea. It has. But one would have expected something - anything - to have picked up the ball and exhibited enough gumption to raise your portfolio at least a bit above zero. Unless you lucked out by timing or some brilliant combination that has escaped most of us, that's likely not the case.
So here we sit on this Monday of the second full week of September, weakened and slightly bloody, looking to the future. Will the "feelings" of impending doom, or even the predictions of severe reversals in September of October come true? Ah, my friend, that really is the question of the moment. Ideally, you're sitting with holdings that will weather "whatever." Do yourself a favor and look them over carefully. What will happen to you if one (or more) of them fall, let's say, 50%? Will it change your life. If not, relax. Oh, but you'd still not be happy about it? Then make some changes until you're positioned such that your happiness is assured.
Can't think of any changes you can make to assure your happiness? Then try one or both of these:
First, sell everything and go to cash. Of course, if your investments are all "taxable" in nature, you may generate gains and owe taxes in April 2016. But you can calculate that and decide if it's worth it. You'll also face the dilemma of when to re-invest, which really isn't something you can just push aside. Sticking with cash for too long will find you ultimately in a poorer condition, even without having lost any "principle" due to the erosion of the value of your US dollars (regardless of all the talk about how "inflation is low").
Second, you might face the fact that happiness - for the most part - really isn't a function of the numbers on your brokerage statement. And if it is, you may want to re-think your entire approach to life while there's still time.
Although #2 will likely be more than you want to address here of a Monday morn, it may be something to tackle sometime soon. As for #1, just do it now and stop worrying.
Easier said than done. Believe me, I know.
And to my Jewish friends:
Happy New Year!
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