Tuesday, August 21, 2012

Investment Update

Recent years seem to have brought more bad investment news than good, so it’s nice to enjoy some positive markets. Sometimes we have to remind ourselves that good years are normal and that recent bad years are abnormal!

Bob Siemens, one of my early mentors, used to remind us that a market bottom is the “point of maximum pessimism” and that a top is a “point of maximum optimism.” He also used to say that a rising market “climbs a wall of worry.”

I share these thoughts because I’m fairly confident we have passed the point of maximum pessimism, and that 2012’s stock market is certainly climbing a wall of worry. Both points create some enthusiasm for investing over the next few years.

What about the presidential election? What about the Federal Reserve’s artificial low interest rates? What about the European debt crisis? What about geopolitical issues in the Middle East or Asia or Africa? Troubling, all, but not devastating for investors.

The most influential factor for investors today is noise. Stupid, senseless, loud, relentless, and insulting market noise. You can’t escape it and it creates a false sense of urgency about finance and investing. Noise blares from every television, computer, magazine, newspaper, and billboard. There’s a Crisis Everywhere … crisis … crisis … crisis. Mostly, it’s absurd.

Stop the madness! We are going to continue doing what has worked best in the past and we expect it to put money in our collective pockets. Our process and policies are based on facts, studies, and proven techniques. We aren’t responding to crises, or whims, or screeching monkeys on television. We are carefully selecting managers and/or securities to meet the specific needs of your portfolio and family.

Our promise when we started in 1998 was simple. We would invest client money using the same principles, strategies, securities, and safety that we use for ourselves. In other words, we treat your family in exactly the same way we treat our own. It’s still true and it’s still our promise.

Our goal in 1998 was also simple. We wanted to build the premier investment management firm in this region. Frankly, we welcome your questions and ideas. Anyone on our team will be pleased to talk with you by telephone, email, or in person. We are proud to serve your family, and we are happy to explain things or discuss alternatives. Every discussion makes us better!

Dan Danford

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