Quarterly Wealth and Investment Insight

It has been said that “successful investing should be more like watching paint dry.” Yet, for many investors today, the speed of change in the markets may be conditioning us to think otherwise. In fact, a recent Reuters report suggests that investors on one U.S. discount brokerage platform are checking their portfolios at an alarming rate of seven times per day.1 Most would suggest that drying paint should not warrant that much attention.

There is an old saying in the investment industry: “Don’t confuse brains with a bull market.” The inference, of course, is that it’s easy to pick winners when markets are rising. The difficulties come when uncertainties arise, as they always do. With the tremendous proliferation of investment information available through the internet and other sources, a modern corollary might be: “Information is not the same as advice.”

It is the immutable market cycle. Stock market valuations can swing back and forth from one extreme to the other, sometimes being depressed and offering high value, and at other times appearing overvalued and speculative. Somewhere in the middle of this swing may be the fair value of any particular equity.