Investment Outlook and Advice (from 2004)

[This entire series of posts is from 2004.]

As some of you know, I recently retired from my latest career as an investment advisor and portfolio manager. Now when I tell people this, they often assume I was forced out by the recent untoward market climate, but are too polite to pursue the topic further.

What actually happened? I beat the market so much for the years just past that my bonuses allowed me to retire when it appeared that to continue to make my clients richer than they already were was not doing humanity any favors. In particular, they had started to spend money like it meant nothing, while hypocritically thinking of themselves as good liberals, opposing school vouchers for poor children in failing schools while sending their children to private schools, that kind of thing. Too much of this and I had had enough.

I continue to manage my own portfolio. Those of you who were too scared to sell your stocks or reallocate your portfolio when the market collapsed, good for you — you did much better, now that the market’s almost back to normal, than those who decided much too late that risk was not what they had in mind… “I thought it only went up!” being a common refrain. Those of you who went to cash and are just now thinking of getting back in… too late! You would have recovered all your losses and then some by continuing to invest in those grim times, but buying in now would be unwise, since you know you won’t be able to stick to your plan when the storm clouds return.

This cute bit of graphics work was done by JB Oxford during the worst of times:

JBOxfordcertificate

I usually have a collection of recommmendations for things to buy, but the market is high enough now that nothing remains on my bargain table. If you must put cash somewhere, a mix of Asian stocks and global bonds should be good for awhile. I particularly like Korea and some of the other funds managed by Matthews, like their Asian Growth and Income.

[Ed: And today, I can say that recommendation turned out very well. I may address investment topics from time to time here.]

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