Is the market going to go up or down?
My answer is, and I know some people do not like it, “What is your investment strategy? What are your assumptions?” This is when their eyes glaze over and I know they do not value my questions.
There are several ways to answer. These are different times. They are difficult because people do not attempt to understand them and act upon their understanding.
There is a huge deleveraging going on and an immense transfer of wealth and power from us to the bureaucracy. Your investment strategy has to recognize and deal with this – whether you like it or not.
Forget about the clichés of buy-and-hold, long-term investing, indexing, averaging down, diversification. I always maintained that these are formulas doomed to failure. These times are proving the correctness of this view. Risk assessment and timing are the keywords.
Your portfolio has to reflect the current times, not yesterday’s environment. And flexibility has to be the main theme. This is a deflationary economy, not an inflationary one. Some think inflation will rise. Eventually. Maybe. No one knows what will happen in one or two years.
What you know for sure is what is happening today. Act accordingly. Forget about yesterday’s markets. We are facing a new environment that is likely to last several years. And above all, listen to the markets. When they change, you will have to change.
I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.
To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/. You can review The Peter Dag Portfolio, free of charge of course. You can also call me at 1-800-833-2782 to discuss your specific money management needs.
George Dagnino, PhD
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