Crazy times

“We are in such bizarre times, all bets are off. It is certainly not the time for ‘buy and hold’ unless your goal is to lose everything. If not, then you need an active, flexible, defensive investment strategy now more than ever.”

– John Mauldin, chairman of Mauldin Economics, writing on 7/19/19. He believes the Fed’s increased intervention in the markets has made this an especially challenging time to be an investor. Read more

The price of trend-following strategies

“Risk management means paying insurance premiums all the time, not just when you want to.”

– A Wealth of Common Sense blogger Ben Carlson, writing on 6/27/19. He compared trend-following strategies to insurance, noting that, “…you pay premiums over time that cost you money (in the form of whipsaw trades where you sell out and buy back in at a higher level) to insure against catastrophe (missing a big chunk of a huge crash).” Read more

Investor, know thyself

“Some discretionary spending on entertainment and travel may be essential for our personal fulfillment, while at the same time only some ‘essential’ spending is truly essential.”

– Financial advisor Michael Kitces, in an article for Financial Planning on 7/23/19, writing about one of the complexities of using a “bucket strategy” to manage retirement spending. When using different accounts for necessary vs. discretionary spending, he said, it can be surprisingly difficult to distinguish between needs and wants. Read more

Beware the short memory

“Let’s not forget it was just seven months ago when volatility and fear were much higher, and the stock market was falling hard. And just like it may have been wrong to sell everything out of fear back then, is there really any reason to bet the farm now?”

– “Blue Harbinger,” cautioning on A Dash of Insight on 7/11/19 that investors should not become complacent. Read more