EconoMonitor

Finance Lunchbox

Markets 1 – Forecasters 0

The stock market is like a celebrity diva. We hate it…and we love it, sometimes we obsess over it. Like Miley Cyrus, some can’t seem to hear or talk enough about it.  But, for 2013, the market has been more like Clay Mathews of the Packers, hitting us from behind then leaving us prostrate, except with big smiles on our faces.

How do you explain it? Most of the best forecasters didn’t see it or call it. The impetuous market again favors us, but for how long?

For me, the market personified, is provocative, but certainly not the lady (or guy) you would choose to elope with. I wouldn’t expect it to be a responsible partner, stuffing laundry into the machine after hurrying the kids off to school.  It wouldn’t be loving and sympathetic, making me tea and cookies on my sick days.

I’ve seen its temperamental behavior enough to know a meaningful relationship is out, so I meet it on more professional grounds. I diversify my holdings into low-cost quality, then let it do its job until it’s time for me to rebalance.  Please understand, I’m tempted like the son of a high-toned Quaker noticing Hustler on the convenience store shelf, I want to crack its cover and peer inside.

I try my best to use my practical, more rational, ehem…more adult side to say “leave it alone.” There’s the cost of the magazine, but that’s not the total cost. Like  the hot stock everyone has to own, we ultimately pay more by getting too close, at least that’s what research has traditionally shown.

Once I know I am in quality; once I am properly diversified, I’ll stay the course and revisit my investments when rebalancing comes around–a practice less exciting, but more fruitful.  After all, the best minds in finance have tried to predict what this most fickle of  ladies wants, and utterly failed.

 

 

 

 

 

 

 

 

The opinions voiced in this material are for general information purposes only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial adviser prior to investing. Securities and advisory services offered through LPL Financial, a registered Investment Adviser. Member FINRA / SIPC

5 Responses to “Markets 1 – Forecasters 0”

derrickstoneJanuary 10th, 2014 at 1:33 pm

Ah, Miley Cyrus in personal finance. This is the same reason I try to bring a friend when car-shopping!

mbednar2616January 10th, 2014 at 4:43 pm

That was the most entertaining set of images describing the market that I've ever read.
I enjoyed it!
Matt

Leave a Response