Unlike the Olympics, Markets Never End
We're more than half way through the Olympics. For the U.S., it's been quite a ride so far. No need to go over all that, but - setting aside the vast stretches of commercial interruptions during prime time coverage - many events were worth witnessing, at least on TV. I've never had the bug to go to an Olympic venue live.
With lots of records being broken in swimming, and Usain Bolt being the first to win three golds in three straight Olympics (the 100) there's been a good dose of extraordinary drama mixed in with the normal. But, really, if you admire and appreciate the efforts of these athletes, the normal provides enough to hold your attention (well, maybe not the beach volley ball, which just seems to go on and on, doesn't it?).
In less than a week it will all be over for another four years. Just like each event has a beginning and an end, so do the Olympics. But for some of the athletes, the end of one event just means getting ready for the next. So while the Olympics will end for all, for some, there's another day of training waiting. It never ends until that day when the athlete reaches the limit of their ability to compete. It comes to the best of them.
Markets, on the other hand, never end. If you think you've got a handle on the current trend, it changes. A trend might end, but it's replaced by another trend - and then another. That's one reason a "buy and hold" strategy appeals to some. And it's not a bad idea some of the time, with the key word being "some." Whether it's a single stock or a particular asset allocation, nothing works forever. Of course, those who believe that holding stocks "for the long run" will make you rich would disagree. The professionals who espouse 'buy and hold' never seem to find market conditions that preclude owning stocks, or at least might indicate reducing your exposure. They'll roll out statistics and charts that make it seem like a no-brainer.
But even the 'buy and holders' have to pay attention - especially when you're relying on your portfolio to provide income over some appreciable period of time, like when you stop working full-time or stop working all together. You may believe a hefty stock allocation will assure your assets will always provide the income you need, even if you live a long, maybe even sumptuous life. But in a year when stocks take a bit hit (it really does happen sometimes!), you'll likely want to reduce the amount you suck out of your portfolio if it requires liquidating stocks that just lost 35% - 50% of their value, as happened in 2008-2009.
So, given that markets never end, they'll see to it that you're never really "done" when it comes to managing your portfolio. You may, like Michael Phelps, take your last Olympic swim and walk away from the spotlight; but you'll never be able to walk away from the markets if you invest your money in them. The end of the Olympics comes every four years. The end of markets likely won't come until Judgement Day.
With lots of records being broken in swimming, and Usain Bolt being the first to win three golds in three straight Olympics (the 100) there's been a good dose of extraordinary drama mixed in with the normal. But, really, if you admire and appreciate the efforts of these athletes, the normal provides enough to hold your attention (well, maybe not the beach volley ball, which just seems to go on and on, doesn't it?).
In less than a week it will all be over for another four years. Just like each event has a beginning and an end, so do the Olympics. But for some of the athletes, the end of one event just means getting ready for the next. So while the Olympics will end for all, for some, there's another day of training waiting. It never ends until that day when the athlete reaches the limit of their ability to compete. It comes to the best of them.
Markets, on the other hand, never end. If you think you've got a handle on the current trend, it changes. A trend might end, but it's replaced by another trend - and then another. That's one reason a "buy and hold" strategy appeals to some. And it's not a bad idea some of the time, with the key word being "some." Whether it's a single stock or a particular asset allocation, nothing works forever. Of course, those who believe that holding stocks "for the long run" will make you rich would disagree. The professionals who espouse 'buy and hold' never seem to find market conditions that preclude owning stocks, or at least might indicate reducing your exposure. They'll roll out statistics and charts that make it seem like a no-brainer.
But even the 'buy and holders' have to pay attention - especially when you're relying on your portfolio to provide income over some appreciable period of time, like when you stop working full-time or stop working all together. You may believe a hefty stock allocation will assure your assets will always provide the income you need, even if you live a long, maybe even sumptuous life. But in a year when stocks take a bit hit (it really does happen sometimes!), you'll likely want to reduce the amount you suck out of your portfolio if it requires liquidating stocks that just lost 35% - 50% of their value, as happened in 2008-2009.
So, given that markets never end, they'll see to it that you're never really "done" when it comes to managing your portfolio. You may, like Michael Phelps, take your last Olympic swim and walk away from the spotlight; but you'll never be able to walk away from the markets if you invest your money in them. The end of the Olympics comes every four years. The end of markets likely won't come until Judgement Day.
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