you are trying to go:|
Cash Flow, Balance Sheet Analysis|
the savings and investing tasks at hand; just a bump in the road, a walk in the
park, or climb Mt. Everest.
you are going to get there:|
manage, modify, monitor, measure, process, and maintain suitable, structurally
sound, and competitive investment portfolios.
well you have done:|
Portfolio Performance Calculator|
it is measured, it will get done.
economic opinion and market forecasting will range from terrible, to close, to
a few lucky calls.
investors are exposed to advertisements, articles, CDs, Websites, and seminars
that use single investment incidences and exceptions to project incredible investment
in mind that those who even suggest or possibly promise annual investment returns
of 100%, 50%, and 30% cannot deliver.
the higher ranges of these investment rates of return were possible to achieve
on a consistent basis, if an investor started with just $10,000.00, a quick compound
capital growth calculation would show that it would not be too long before that
investor would have just about all of the money in the world.
these returns are commonly suggested to be in the realm of possibility, the purveyors,
or should I say predators, of these investment returns should not have to be promoting
their investment scams, each should have about all of the money in the world by
now, and there would not be any money left for either you or for me.
said back here on planet earth a $40.00 equity going to just $43.00
in a year equals a 7.5% return on capital, a $30.00 equity going to just $33.00
in a year generates a 10% return on capital, or a $20.00 equity going to just
$22.00 in a year and declaring a $1.00 dividend is a 15% return on capital; realistic
investment return expectations for an investor seeking primarily capital growth
and willing to assume moderate investing risks with occasional variances above
and below these investment returns in extreme and unusual investing circumstances
best of all, as an investment advisor, you can deliver.
standard investment plans presented in the eye-catching wizardry of colorful
pie chart, graph, and historical investment performance data-dump infested reports
offer considerable information about what investors already know about
themselves and general theoretical information about the basis, the form, and
the design of the investment plan; but, little about the details of the 'frame'
and the 'structure' that will give an investor an investing direction and really
nothing about the 'engine' that will actually drive the investor to his or her
investing performance destination; the 'when, why, how, and what ifs' of investing
Advisors' Performance Oxymoron
investment advisors and investors have succumbed to the latest inane investment
advising wisdom of the day; passive 'buy, hold, and forget,' untimed, unmanaged
index funds, exchange traded funds investing unknowledgeable, unskilled,
undisciplined, unmanaged, untimed investing, an investing performance oxymoron:
Investment advisors and investors, in effect, should concede that neither one
of them has the management skills nor the qualifications to manage investments
and time investing and that, therefore, the best solution is that investors should
buy unmanaged investments to eliminate investment management and timing; great
concept, take all of your hard earned capital and invest it for the future without
management or timing.
to do does not mean; therefore, don't even try.'
going to Warren Buffett and suggesting to him that to improve investment performance
he should no longer manage or time his investments, that, instead, he should invest
in index funds in which the best he could do would be to be average striking
out, bunting, and hitting singles most of the time while never really having the
opportunity to hit doubles, triples, and an occasional home run and, worst
of all, while actually assuming greater investing risks, not less, than most other
investments because index funds are missing the two critical investment performance
components that really matter, that actually determine investing outcomes; investment
management and investment timing.
of control investing,' what a great money management concept!
this investing strategy is tacit admission to clients that the investment advisor
is unknowledgeable, unskilled, and undisciplined, that the investment advisor
can't do what he/she was hired to do bring value added to the investing
performance equation and that he/she will most likely underperform.
but have you seen my pie charts?'
advisors, stockbrokers, and individual investors continuously seek the nonexistent
wellhead of the 'fountain of perfect investment recommendations, investing strategies,
and, investment timing sources' in the mistaken belief that 'best' investing performance
can only come from better investment ideas while being unwilling to acknowledge
the fact that they themselves are most often the weakest investing performance
five greatest obstacles to investing performance:
not a loss until it is sold.'
rely on unmanaged index fund investments.'
am a long-term investor.' translated, I can make a reasoned decision
to buy based on current and projected investment value and market conditions;
but, I refuse to make a reasoned decision to sell based on current and projected
investment value and market conditions.'
Fundamentals, and Value
price, fundamentals, and value are seldom aligned with one or two variables
being ahead of or behind the other(s) most of the time fundamentals and
value will always ultimately be reflected in price at some point in time; however,
the difficulty being that no one knows when, to what extent, or for how long.
it is imperative that one have a dynamic, forward-looking investing style and
proven investing strategies in place to help one evaluate the relative actual
and projected alignments of price, fundamentals, and value in an effort to buy
the best for the best price at the best time and to sell the best for the best
price at the best time.
investment advisors and investors must accept, understand, and agree that, on
occasion, they will be both right and wrong because investing has being both right
and wrong built into it.
investment decisions are not the primary reasons for investing failure:
is not having investment selection disciplines.
is not having portfolio management disciplines.
is not having portfolio design and construction disciplines that define right
is not having price management disciplines resulting in doing nothing when right
investing and investment performance critical path conclusions are as clear and
as inescapable as are any other investing and investment performance priorities
centerpiece of one's investment advising and investing performance skills must
be to build and to protect investors' investment capital by first creating unique,
structurally sound investment portfolios that match suitable, hopefully timely
investment sectors, investment categories, and individual, underlying investments
with different investor investment profiles different investor investment
risk tolerances, different income and capital growth objectives, and different
time horizons and then to keep investment portfolios competitive by managing,
modifying, monitoring, and measuring investment portfolios one at a time,
a few at a time, or all portfolios all at once as investors' investment
profiles, the current market conditions, the market outlook, and relative investment
values change as part of the ongoing decision making, action taking investment
advising and investment management, and investing performance processes:
convert rhetoric into results.
thoughtfully define, relentlessly apply, and rigidly enforce investment selection
and management disciplines, rules, and procedures and portfolio design, management,
processing, and performance disciplines, rules, and procedures
govern the dynamics of change.
take advantage of change rather than to be the possible victim of change.
amplify the impact of good/well timed investment decisions.
mute the effects of bad/poorly timed investment decisions.
an organized, efficient, and disciplined investment advising and investing environment
in which each investor, regardless of investment need, knowledge, experience,
and the amount of investment capital, will be honorably, properly, intelligently,
and efficiently served consistent with each investor's investment profile and
investment goals, the current market conditions, and the market outlook; nothing
learned the hard way, do it right the first time, suitable, hopefully timely investments,
suitable, structurally sound, and competitive investment portfolios, full disclosure,
and investor informed, economic best interests investing with specifics and in
Disciplines, Rules, and Procedures
disciplines, rules, and procedures are the investment advising and investing performance
selected at random and governed by the most basic user defined portfolio management
disciplines, rules, and procedures the weakest or completely missing investing
performance links for most investment advisors and almost all individual investors
to create, manage, modify, monitor, measure, and maintain unique, structurally
sound, and competitive investment portfolios and to process investment portfolios
as investor investment profiles (risk, income/capital growth objectives, investing
time horizon), the current market conditions, relative investment values, and
the market out look change will outperform carefully selected investments generally
selected and weighted sound and suitable investments placed in unique, structurally
sound, and competitive investment portfolios as determined by and governed by
thoughtfully defined, relentlessly applied, and rigidly enforced portfolio design
and management disciplines, rules, and procedures will outperform most market
indexes almost all of the time.
the extent that one's 'sense of the markets,' 'investment timing,'
and a 'vision of the future' can be improved, investing performance will