This weekend’s Barron’s magazine ran an interesting article about Annie Duke, a world champion poker player. Annie now provides consulting and coaching services to managers in the financial services industry. Her insights into risk management under uncertainty can be extremely valuable.
Yesterday I posted on how market timing can materially reduce long-term investment returns. An excellent way to eliminate the negative impacts of emotionally-based market timing is through holding a portfolio that is diversified across several asset classes.
Volatile stock market conditions like we have experienced lately can cause anxiety and induce people to sell their stocks and wait for “a better time to invest”, in other words, “time” the market. History shows there can be a big cost in attempting to time the market.
As you know, this past Monday, we executed our strategic decision to concentrate more of your assets in what we call “stalwarts”, or companies with the strongest competitive and financial positions and which we believe are best positioned to weather the current uncertainties and thrive upon a return to normalcy.