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June 13, 2016 | Distractions over market moving headlines

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.

My investing premise:
“Managing your nest egg by reacting to every market nuance is like slipping into quicksand.”

Investors are keen to keep a watchful eye on headlines that move the markets.
All in the hope of applying their findings to improving portfolio selections.

Try as they might, investors often take on mission impossible.
It’s quite easy to get distracted by the endless supply of market minutia.

I learned that lesson years ago.
Savvy investors don’t need to be knee-deep in all that information.

Many believe they understand market moving situations.
This confidence often leads to quick decisions that later become regrets.

If you must, reduce the headlines to a manageable few.
The bigger question is whether anyone should pursue this guessing game at all.

I offer some headline topics that can lead to more worries:

Negative return interest rate moves.
Britain voting to exit the European Union.
Global economies weaken further.

Here are some that can deliver upside potential:

China displays signs of turning around.
Printing more money by central banks.
Improvements in corporate earnings.

Each of these headlines is capable of moving stock and bond markets.
It’s frustrating when the same headline reacts differently the next day.

Reality is that investors have no power to influence the headlines.
Furthermore, worrying about them does not change the outcomes.

You can think you know where markets are headed.
Just be prepared to be wrong for long stretches.

That is a tall order for anyone to get consistently right.
If adventure is not your game, I offer a far simpler approach:

Sell some of your winners as their prices rise.
Buy some quality laggards as their prices fall.
Repeat both of these steps from time to time.

It’s a less demanding strategy than interpreting market headlines.
Just make sure that your trades fit within your asset mix targets.

Stop getting distracted by events beyond your control.
Markets can be very unforgiving.

Talk soon,

Adrian

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June 13th, 2016

Posted In: Adrian Mastracci Blog

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