New York Stock Exchange

Again I would like to discuss the problems we have as a nation and a world. Police continue to be killed in the name of revenge. Or is it a revolution? Terrorist continue to make cowardly attacks on innocent people. There continues to be political scandal after scandal.

The ‘people’ are demanding change. C

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hange in methods. Change in leaders. Change is distribution of wealth.

What these ’people’ don’t talk about is changing themselves. Becoming accountable for their own actions. Change the person we push blame on. Whether it be the government, or our employer(s), or our family, or even Wall Street. We need to push the blame on ourselves.

Maybe what we really need is to begin to believe in ourselves. Perhaps a little confidence would do wonders. Before we can accomplish anything, wealth or success. We must believe that it is possible. We must stop doubting ourselves.

Of course this does not mean there will be no setbacks. There is no clear path to any worthwhile goal.

Many investors believe there is a way to earn stock market returns with Treasury bill risk. What most end up with is Treasury bill returns with stock market risk.

Successful investors find an investment philosophy that they believe in. And they stick with it. There is no strategy that will always earn the ’best’ returns. Successful investing will always involve risk. Which means at times your portfolio will be down.

Remember no one can tell you whether the next 20% move will be up or down. But I will tell you the next 100% move will be up.

Successful investors also realize that without professional help they will allow their emotions to make investment decisions. This means that sticking with a strategy requires discipline. Discipline that an investor coach/fiduciary adviser provides.

Remaining disciplined sometimes means you will look ‘stupid’ or you don’t know what you are doing. Or the most used phrase ‘it’s different this time’.

Over the long term remaining disciplined to your strategy will lead to success.

You will have many advisers approaching you with the ‘hot’ strategy or product. Keep in mind these ‘advisers’ are nothing more than salespeople, pushing the right buttons.

So stop blaming someone or something else when things do not go your way. Many times it is the result of you losing your focus on the long term. Many times it is the result of you not being disciplined during market extremes.

As I go through life I hear the older generation saying that they would not want to be starting over. They do not understand how the younger generation will survive. However every older generation says the same thing. And we continue on. This pattern has been going on for generations.

What people don’t realize is that change is constant. The only thing that doesn’t change is that things change.

Stop stressing about short term investment results and find an investor coach/fiduciary adviser. Someone that will be there for you in both up and down markets.

Stop pushing blame and take responsibility for your actions.

Remember unsuccessful investors are focused on short term results while successful investors are focused on the long term. Which are you?

Your retirement account is far too important to rely on predictors of the future. There is no substitute for a globally diversified portfolio to reach your long term retirement goals. Any strategy that requires an accurate forecast of the future is destined for failure.

Market Timing is a Loser’s GameMr. Macke, who noted that “trading markets is what I do for a living,” opined that you can time the market. According to him, it’s really simple. All you have to do is use “rudimentary tools like purple crayons and rulers.” That’s good to know. He must be a very wealthy man. If an investor with his skill was able to forecast all the months that the NYSE outperformed T-Bills (which should not be very difficult for a skilled market timer) from 1927 through 1978, an investment of only $1000 would have grown to $5.36 billion!

Market timing newsletters must have run out of purple crayons. A study (PDF) of over 15,000 predictions by 237 market timing investment newsletters over a twelve year period found that almost 95 percent of them had gone out of business. The authors concluded: “There is no evidence that newsletters can time the markets.” Another study featured an interview with Mark Hulbert, who monitors market timing newsletters. Hulbert found that, for the ten year period ending in 1997, all twenty-five newsletters tracked underperformed the S&P 500 index.

Mr. Macke provides no support for his market timing recommendations, which is typical of many in the financial media. There is a lot of data on investing. Before you follow the advice of self-styled investment savants, you should act responsibly and take the time to review it. If you do, you will be persuaded by this observation from legendary investor, Benjamin Graham: “If I have noticed anything over these 60 years on Wall Street, it is that people do not succeed in forecasting what’s going to happen to the stock market.”

via huffingtonpost.com

There will always be ‘experts’ proclaiming their ability to time the market. Unfortunately these ‘experts’ are never the same person. The reason is no one can predict what the market will do next. Their success is a matter of luck and not skill.

PLease comment or call to discuss how this affects you.