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Clear Thoughts
Every Second Counts
| Prioritization is another key to better living and investing |
In life we frequently talk about what we would have and should have done. In this context, people often are referring to travel, emotions and love, or a dramatic sports play that never was. Hopefully no one has any true regrets. Conversely, we also believe that we should savor every moment, leaving the urgent for the important and making the most of every second we are alive. After all, speaking philosophically, our time on this planet is short and there is so much to do, see and experience. There is great value in living in the moment.
Paradoxically, investing holds very little resemblance to the rest of our lives. When making investment decisions, our instincts and emotions are often wrong. In the investing world, common sense is anything but common, and following the markets moment to moment is more like an evil drug than something worthwhile, unless there is clear purpose or an end game in doing so. Living in the moment, from an investing perspective, can be counterproductive.
On the web, numerous sites offer real time tracking of the markets. Online brokers encourage the use of real-time quotes, not only to enhance investor knowledge, but also to increase trading. Frankly, we think the behavior this engenders often resembles gambling more than investing, akin to the type of day trading that lost its luster in the late 1990s.
At Clear Asset Management, we watch the markets real-time to protect the interest of our investors. Statistically speaking, single moments typically mean little to us, except on rare occasions. Over short periods of time, stocks sustain losses due to transitory events, speculation or minor Wall Street analyst disappointments; they often bounce back and frequently eclipse their prior share price within days, weeks or months.
As part of our risk management procedures, we monitor the market and our stocks real time. This is an important priority for us, along with managing client assets and communicating our actions. On rare occasions, we will act to protect investments based on short term fluctuations. But remember, seconds rarely count. The secret to long term investment gains is sticking with your investment strategy and not being concerned with what happened a minute or an hour ago. In fact, days and weeks are usually too short a time horizon to evaluate an investment or a strategy.
As this week ends with our new All Clear portfolio, our composite of our six core portfolios, and four of our six portfolios all beating their institutional benchmarks, we are reminded of last week where we did not fare as well. In the end, our 2005 and since inception performance speak for themselves, not what we gained or lost in a single week.
So enjoy moments with friends and family, get some work done. Do not waste your precious time second guessing the market. You already have hired us to monitor the fluctuations of the market with an eye on long term performance, and we think you made the proper, Clear choice.
PS Read in Kiplinger's one of our take on BMHC and the housing market. Also remember, only 4 more weeks to get your 2005 IRA contribution in.
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