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September 28, 2015 | Simple Strategies Survive Stormy Markets

Adrian Mastracci

Adrian Mastracci, Discretionary Portfolio Manager, B.E.E., MBA. My expertise in the investment and financial advisory profession began in 1972. I graduated with the Bachelor of Electrical Engineering from General Motors Institute in 1971. I then attended the University of British Columbia, graduating with the MBA in 1972. I have attained the “Discretionary Portfolio Manager” professional designation. I am committed to offering clients the highest standard of personal service by providing prompt, courteous and professional attention. My advice is objective, unbiased and without conflicts of interest. I’m part of a team that delivers comprehensive services and best value in managing client wealth.

Today’s most frequent question directed at me is: “What should I do in these markets?”

Investors constantly fret about surviving stormy markets, like the present.
Rising some days then slipping on others.

For example, the Dow trimmed near 11% from its 52-week high.
Similarly, the TSX has fallen near 14%.

Financial history repeats itself all too frequently.
The absence of global growth is felt in all markets.

Price swings of this magnitude should be expected as normal by every investor.
Many questions arise, such as:

Is it wiser to seek safer shelter on the sidelines?
Should I jump in with both feet?

Are stocks poised for a comeback anytime soon?
Will my nest egg incur another haircut?

Stocks are not appropriate for those having low risk tolerances.
The personal risk analysis guesstimates the comfortable risk ballpark.

The sane approach for investors is to accept some basic facts:

Markets have much to do with plain investor confidence.
Market direction can and does change quickly without notice.

Markets react to the avalanche of daily news and data releases.
Markets are driven mainly by earnings and future prospects.

Most investors say they can’t stand market volatility, so let’s think this through.
If the world had no market volatility, investors would have far less opportunity.

I highly doubt that is what investors truly want.
Perhaps, there is a learning curve that needs some attention.

The investor’s mission is to put aside apprehensions and tensions.
Along with knee-jerk reactions and emotional decisions.

Dealings with the markets are best kept simple and sensible.
Here are some of my fundamental strategies for stormy investing:

Market behaviour can’t be changed but the investor’s can.
Long-term thinking is your best portfolio manager.

Always be prepared for bumpy investing roads ahead.
Don’t obsess about market noises masquerading as news.

Invest only capital not required for at least five years.
Refrain from taking action when no action is better.

Stop chasing investment returns at any cost.
Stock prices overshoot in both directions.

Keep enough cash to nibble on the bargains.
Learn to take a profit every so often.

I empathize with investors trying to make sense of stormy markets.
Surviving those markets demands plenty of patience and discipline.

My advice to investors is to accept fears, worries, jitters and volatility.
They will continue to affect your investments, no matter what you do.

Remind yourself of this snippet of wisdom.
Short-term market swings are part of the roadway to long-term investing.



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September 28th, 2015

Posted In: Adrian Mastracci Blog

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