Forget willpower, forget control. What if the big secret in life was just letting things be?
We were reminded the other day of the classic Marvel character the Hulk. There have been too many versions of this giant green guy to count, but his whole deal comes down to losing his composure. “Hulking out” has come to mean flying off the handle, usually in a rage.
When new acquaintances learn what we do for a living, they wonder how much of our time we spend just sitting with upset or aggravated clients: does every new headline set people off? How do we handle all the turmoil?
Clients, you can imagine how I just smile through these conversations! You know that you’ve come to be the best clients in the world by the way we navigate things together. We know how to put short-term downturns in perspective, how to ride the highs and lows with our eyes on the big picture.
Of course there’s turmoil: so much of life is that way! Why would it shake us?
The Hulk reveals his big secret, how he has harnessed his anger to put it to his own uses (in his case, to fight villains of all sizes). It’s not about taming his anger; it’s about living with it.
“I’m always angry,” he says.
Clients, that’s the ticket right there: things are always a little uncomfortable. And we can choose to accept it as part of the deal.
Want to talk pain, gain, or anything in between? Email or call the shop, anytime.
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Our thoughts become words; words, actions; actions, habits; habits, character.
What we “do” for work is sometimes hard to describe. Often, it starts in the mind. Either we have a hunch, or a client wonders, “What if…”
Soon, we’re writing or talking about it. We’re acting on our plan. We’re integrating the change into the overall vision. And we’ve done it! We’re working our whole, integrated system.
Simple enough, right? Deliberate motion.
But it starts with planning, taking those thoughts and arranging them in the direction of our goals.
Lately, we’ve been thinking about that series of relationships. We’ve seen the sentiment posted above in many forms over the years, and we found out that versions of that idea have been ascribed to various poets and teachers for hundreds of years (not to mention Lao Tzu, Margaret Thatcher, and even the Buddha!).
Maybe the credit ought to be shared after all, because we think there is treasure of wisdom in this notion. If we could condense the chain, it would be this: planning is the attempt to shape your destiny.
Planning is agreeing to take your ideas seriously enough to examine them. Planning is a decision that your life will no longer be a thing that happens to you.
Planning is “opting in” to your life.
Clients, there is no one path we’re prescribing here. But we are firm believers in helping you work toward your goals, and geez are we geared up about it.
Whether it’s a thought from your head or a question for us, we’d love to hear from you. Write or call anytime.
There is a split in the investment world. One camp believes people should just buy passive products that seek to mimic the investment universe at low cost. They think it is not possible to gain any advantage by actively managing portfolios. The other camp believes there IS a benefit to actively managing portfolios and choosing particular investments.
You know where we fit: investment research, the selection of securities, and managing portfolios is about all we do—except talk to you. We are in the “active” camp, not the “passive” one. The debate rages on.
One thing is certain. The passive camp enjoys lower expenses, because they ordinarily only do a fraction of the work that we do: we research about individual companies, read annual reports, sell this and buy that to try to gain an advantage.
When you think about it, the whole universe of active investors cannot all deliver above-market returns—with their higher expenses. So the idea is the whole universe of passive investors must therefore do better than the whole universe of active investors, due to lower costs.
Our view is that the average performance of active investors is determined by some investors who are above average and others who are below average. So it is imperative for us to be above average—to be worth more than our freight—to have a sustainable business.
Once upon a time an active manager purchased a bond that had declined after it was issued, for 50 cents on the dollar. It was purchased from another active investor, who took a 50 cent loss. The bond later matured for a dollar, so the bargain-buyer had a 50 cent gain. On average, active investors broke even. But one active manager did better than average, and one did worse than average.
We do a whole lot more than manage investments, of course. Planning to help you work towards your goals, putting market action in context, answering your money questions, coordinating with your legal and tax advisors… these things are also part of our work. But striving to grow your bucket is why we get up in the morning.
Average (ordinary, middling, mediocre, unexceptional) is not good enough. Active investors need to be above the line over the long term. We have no guarantees to offer. But our goal is to be exceptional.
Clients, if you would like to discuss this or anything else, please email us or call.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All indices are unmanaged and may not be invested into directly.
All investing, including stocks involves risk including loss of principal. No strategy assures success or protects against loss.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing.
When we began in business twenty-one years ago, we recommended a wide variety of investment products. Over time, our efforts have increasingly focused on platforms in which our investment philosophy and research may be more effectively employed. Most of our time and energy now goes into the investment advisory services we offer through LPL Financial.
Clients, many of you have assets outside of LPL Financial. We believe it is time to re-examine these arrangements and determine whether they are still appropriate. We might have recommended strategies in the past that may not be the best ones for the future.
• A generous bull market over the past decade meant that other arrangements generally remained beneficial to you, in our opinion.
• But market conditions are likely to become more hectic, sooner or later.
• We have greater flexibility to seek bargains, avoid stampedes, and pick our spots when assets are in the LPL Financial platform, instead of another institution.
The better off you are, the better off we are likely to be—this has been a guiding principle at 228 Main. Our motivation is to be in the best position to keep your portfolio responsive to changing conditions.
If we may possibly improve your situation by taking a more active role in managing your assets, we welcome those duties. If you decide that outside investment accounts remain your best option, we’ll still be happy to work with you on that basis.
We would like to talk, having no pre-conceived notion about what is best for your specific situation. Please email us or call.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risk including loss of principal.
One of the characteristics of humorist Garrison Keillor’s fictional town of Lake Wobegon is, all the children are above average. The joke is that by definition, average means that some are above and some are below. All of the children cannot be above average.
Let’s say the advocates of index investing (also called passive investing) inhabit a fictional town called Passivia, where their beliefs are the rule.
In Passivia, all the investors are below average. Nobody does better than average. If one appears to, it is marked down to luck. Furthermore, it is thought to be impossible for any human to do better than average because of innate flaws in human nature or other factors. Fortunately, the advocates say, it is possible to nail average performance by following their plan. And since all investors are below average, this is an improvement for everyone.
Just as all the children in Lake Wobegon cannot be above average, all of the investors in Passivia cannot possibly be below average. It is a joke that almost nobody gets. Some investors necessarily do better than average and some do worse—just like the children of Lake Wobegon.
In our shop, we believe that investors do considerable damage by joining stampedes in the markets. But somebody is on the other side of every transaction. One of our three fundamental principles is to avoid stampedes in the market.
We also believe it pays to try to find the best bargains, which are often found among the least popular companies or concepts. So while many may be chasing fads that already made investments too expensive, we are looking for bargains.
The third principle is to ‘own the orchard for the fruit crop.’ If we do so, we do not need to care what the neighbor would pay for the orchard, or whether his bid is higher or lower than the time before. By inoculating ourselves against reaction to short term price changes, we are better able to focus on long-term results.
We have no guarantees to offer, not even that we will be successful in applying our principles. But we believe the attempt to do so increases the potential that we will be above average over the long term. After all, some people have to be above average, by definition! If you have questions about how our philosophy applies to your situation, please write or call.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All indices are unmanaged and may not be invested into directly.
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