Observations

I really enjoy talking to my subscribers. They offer great insights and their questions lead to very interesting discussions.

The tone of recent calls has gradually changed as the market moved higher.
Apprehension about the market outlook seems to become obvious. How can we best take advantage of the rise? I would like to address this issue because it is an important one.

The markets have always been uncertain. The markets have declined sharply, to rebound with even more virulence. The non-professional cannot withstand this what-seems-to-be volatility. The palms start sweating. Bad decisions are made at this precise time.

We lost great clients because of it. The reason is that emotions overcome rationality. They made the decision at the wrong time! At the precise time the market bottomed.

Why? Because the client tries to time the market and then tries to time the money manager.

The professional money manager has the experience to withstand what is happening and what seems volatility to the casual observer. Emotions amplify volatility.

The main issue is that professionals have an investment process. This is the reason they can control their emotions. Hulbert showed that money managers have their own style. They will not change it over the long term, and their performance is consistent over many years because it reflects a proven investment process.

Our investment process is geared to managing risk. This is our style. Our Picks rose 7% when the market declined 23.4% in 2002. My book Profiting in Bull or Bear Markets shows my approach.

Our advice is that you should not try to time or outguess money managers. They will change strategies when they need to be changed. Trust their investment style and decision making capabilities especially if they have a proven record to withstand difficult times.

(This Observations appeared in the 6/16/03 issue of The Peter Dag Portfolio).

More details in my The Peter Dag Portfolio , in Dag's Exclusive Market Alert, and my free educational videos on http://www.peterdag.com/.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.