Making Sense Out of Nonsense

I have not been sending out any blogs for a couple of weeks due to the fact that not much is going on in the markets to comment on. However, I have not been sitting on my hands from a writing standpoint due to the production of a new book which I am working on. The working title is “Forty Years of Investor Mistakes” which will discuss what I observe in my investing career. We are trying to have it ready by Christmas.

It always amazes me how the talking heads on various “news” sources attempt to provide sage advice on why the markets are doing what they’re doing which is really nonsense. Bear in mind these so called experts have to keep you watching so they can sell more commercials. One of my chapters in the book explains if your investment discipline is based on the hot news of the day you really have no discipline and disappointment will result.

You are now receiving your statements and based on your allocation you may not be up as much as this fast market. However, most of our models are based on risk management and not performance chasing. As this market continues to rise risk increases for some type of necessary consolidation, therefore the “mistake” uninformed investors make is they disregard the discipline and amount of risk they were comfortable with when they originally invested and throw caution to the wind and chase returns. Someone asked me when was the least risky time over the past few years to go all in (100% in the market) over the last five years? The person asking this was still holding cash and bonds. My answer was very simple, “March 9 2009, the S&P 500 was hovering around 650 and as of this writing the index is bouncing around 1700. Draw your own conclusions on risk.”

Next week I will discuss the possible hindrances to the indices continuing this staircase upward movement. I still feel we have a new bull market in the making even with these new highs on the indices.

Bill

Advertisements

About billriley

Chief Executive Officer, Chief Compliance Officer A co-founder and shareholder, William Riley is a 33 year industry veteran, who observed, many years ago, that over time institutional investors typically outperform individual investors while accepting less risk. In his role as Chief Executive Officer, Bill works tirelessly to make the wealth management strategies used by the world’s wealthiest families and largest institutions available to our firm’s individual clients. Bill combines fundamental and technical analysis to minimize investment portfolio risk and maximize potential returns. He uses a variety of non-correlated asset classes, including alternative investments, to minimize portfolio volatility and seek absolute returns in down or flat markets. Finally, Bill believes in a comprehensive approach to wealth management that fully coordinates and seamlessly integrates portfolio management, risk management and asset protection, trust, estate, tax and charitable planning. Prior to co-founding Riley Wealth Management ,LLC, Bill held management positions at Merrill Lynch, UBS, Raymond James, Paine Webber and J.C. Bradford. Bill founded Fort Worth branches for Raymond James and J.C. Bradford. Prior to entering the financial services industry, Bill ran his families closely held businesses. Bill’s experience operating family businesses combined with his wealth management experience makes him uniquely qualified to advise entrepreneurs and business owners on a variety of matters including complex and sensitive issues relating to business succession. Bill’s degrees and designations included a Masters Degree in Business Administration (MBA), the Chartered Financial Consultant designation (ChFC), the Chartered Life Underwriter designation (CLU) and the Wealth Management Specialist designation (WMS). A Fort Worth native, Bill is a TCU alum and active in many civic and charitable organizations. Bill and his wife, Marsha, now reside in Colleyville, and they have four grown children and four grandchildren. When he is not working on portfolios or studying financial markets, Bill can be found on the golf courses of Ridglea Country Club.
This entry was posted in Uncategorized. Bookmark the permalink.