Tuesday, April 25, 2017
If I Could Go Back, Would I Do Anything Differently?
Q2 2016 Commentary
“Nobody knows anything...... Not one person in the entire motion picture field knows for a certainty what's going to work. Every time out it's a guess and, if you're lucky, an educated one.”
- William Goldman, novelist, screenwriter
Here we are post-Brexit, wondering which end is up and what does “leaving the European Community” mean anyway (if anything)? All the betting was on the “Bremain” side of the ledger and when “Brexit” won out, everyone long the status quo got caught with their shorts (short pants, not short positions) down. A recent client conversation went something like this: “You guys are walking a tight rope which someone has set on fire, while someone else is throwing rocks at you and yet another someone is heading towards the tight rope with a large set of sharp garden shears.” To which we added: “You forgot the live grenades we’re juggling.”
Fortunately – and most importantly - we avoided making mistakes while global markets went through a two-day hissy fit. For the time being, we’ve come out on the other side in rally mode with market averages nearly back to their closing prices pre-vote. Of course, we’re heading into a long holiday weekend and Lord knows what will happen then – because – nobody knows anything.
My Inbox is now filled to overflowing with post-Brexit analyses – “What You Need to Do Now” stories that always come out after a big move. I haven’t read even one of these “cool-headed analyses” – because – nobody knows anything – and I know that adding to the minutiae in my head isn’t going to help me decide what to do “next time”.
To be successful in the capital markets, you have to buy when you don’t want to buy and sell when you don’t want to sell. And when conditions dictate doing one or the other but it’s too gut wrenching, the best action to take is to re-balance your accounts based on your carefully-considered risk tolerance. If even that is too scary, the best action is no action. Take comfort in knowing that you aren’t the only anxious, clueless wanderer in the desert – because - nobody knows anything.
© 2016 Kim Miller, Certified Financial Planner™