Bringing discipline to client portfolios
In light of the events of the last nine months, investors and advisors alike are reexamining the process used to build portfolios.
A May 25 in the Globe and Mail highlighted two tools to overcome investors’ (and some advisors’) emotional reactions to market movements, creating the impulse to buy and sell at exactly the wrong times. The article quoted the words of Walt Kelly’s 1950’s cartoon character Pogo: “We have met the enemy and he is us.”
The solution for advisors lies in bringing much more discipline to how client portfolios are managed, using two tools from institutional investors. The goal is to borrow Warren Buffett’s dispassionate approach to investing, which he summarizes as: “Be fearful when others are greedy and be greedy when others are fearful.”
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