One Size Fits All?
Often I’m asked about our investment results for the last
year. It’s a reasonable question on the surface but betrays a misunderstanding
of investing and personal finance. Unless results are disastrous or too good to
be true, you can’t tell much in a year or even a few years.
Each of our clients
has a different portfolio and thus different results. Would you outfit all of
your friends with size 8 black shoes regardless of their foot size, taste and
budget?
For most people, a home is one of their biggest investments. They may
live in the house for 20 years or more. Over that time generally --- until the
recent unpleasantness – house prices rose. Sometimes prices rose quickly but
more often they rose in fits and starts with occasional drops. Long-time
homeowners accumulate wealth patiently and while using the house for their
family’s daily life, only dimly aware of market fluctuations.
But with the
stock market, where prices change continually, people focus on quick results.
That impatience isn’t benign; it causes much misery. Inspect the soup ingredients and the recipe
but let it simmer. Don’t yank it off the stove at the first pleasant whiff.