Yesterday's decline was swift and unpleasant. The talking heads blamed it on the Bear Stearns fund that appears to be going down for the count.This may be true or it may be that this fund business was just an excuse for a down day coming in the middle of multi month run with more up days than could be reasonably hoped for.
I've been saying that I think the dip from February was the start of a period of increased volatility. For months we heard how low the VIX was and while it is not real high now it is higher than it was.
If it is correct that volatility is and will stay higher for a while, some longer term folks might be tempted to try to game the market more than they normally do.
Changing your stripes like that in reaction to something happening in the market is going to be a bad idea more often than not. Over time people evolve, the market evolves and people's strategies evolve, this makes sense, but not over the course of a week or three.
As I hear from people in the course of doing my job or as a function of the writing there seems to be a common thread of making investment process complex. While I suppose there is some complexity to portfolio construction it doesn't need to be absolute alchemy. Some blend of good companies, products that do what they are supposed to or, even better, a mix of the two can be an effective and manageable way to invest.
This is not to imply shortcuts but maybe time does not need to spent looking for instances of the 10 day crossing over the 20 day and back again. Plenty of people have success with that or other similar ideas but if that's not you, you probably don't need to switch this week.
5 comments:
Hey Roger:
What is with that "I Love Dick" add? Really adds some class to the place.
It's a sign of increased volatility, silly!
Seriously though, it's interesting how stocks, bonds and gold moved in lock-step yesterday. If it wasn't for a certain Chilean bottler, I'd have no love at all.
"I love DICK" is a disgrace Roger. Many 50+ year old readers will leave with that kind of spice on here. Very dirty deal, imho.
Jake
I like keeping abreast of your advertisers.
I wonder if she likes the Market too. (Actually I wonder if she even knows what the Market is...but who cares). Hillary Kramer was on the Nightly Business Report last night saying that in her opinion it's side-line time. So at least I know that she doesn't like the Market right now.
Roger did say a couple of days ago that he was going to something to remove the ad. It can't be doing much to impress the ladies that come on to this site.
What?! Do these marketing idiots that design these ads think that investing is like sports or something, and that only men are interested in Wall Street???
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