How Risky Are You?

Blogger's Note: Most of these early posts were actually emails that I sent to my clients years ago and slightly edited for this blog.  I hope that the information presented is relevant to the general public despite being addressed to a smaller audience. 

Are you a bull or a bear?  Gosh, in today's market I think most of us would prefer to be a mouse and hide in the back of the cupboard with our little piece of cheese!

Frankly I hate the propaganda mill that is known as the financial markets press that continually tell us not to worry (or to worry a lot...depending on the day) and have always sought to develop a strategy that will protect my clients' wealth ALL of the time.  What I have come up with is a bit contrarian, off the beaten path and requires those who work with me to take responsibility and to take action.  To the extent that one follows this plan, it works.  But, it is not perfect and we all are prone to sloth and taking the path of least resistance.

One component of my plan is managing your market assets.  Too many of us have too much of our wealth in the market, but I recognize that changing this takes time.  In handling your market assets, I follow a proprietary model, establish well diversified, risk-adjusted portfolios and seek to minimize losses, choosing some level of active managment over "buy and hold."

Some people ask me if I "market time" and the answer is an emphatic "no".  But, I am also simply not going to stand by and watch my clients' accounts suffer huge percentage decreases while all the while saying such things as, "Don't worry, the market always rebounds and over the long term...blah, blah, blah." You've heard it all before.

But when to make defensive moves or enter the market is no easy task.  In fact, in most cases the time to make moves is exactly OPPOSITE what one would FEEL is right.  Which is why I don't go on feelings, but use certain market indicators to assist me.  Now, I don't have a perfect system and no one can account for the market manipulation of the Federal Reserve or other international events.  But on the whole, I believe that making these strategic moves is beneficial to my clients' accounts.

Now it is my job to read items such as these:

A Long-Time Bull Turns Bearish

or this one:

 Is A Market Crash In The Offing?


 and to worry about your money.  That is why you hired me.

But I wanted to give you a sense about how difficult it is to know when to stand pat, take defensive moves or go against the tide and invest.  In the end, though, if my calls make you lose sleep at night, it is time to adjust down the risk in your portfolio.