Chasing Heat (SLV, SPY, NFLX, GLD, IAU)

Print This!

volcano Chasing Heat (SLV, SPY, NFLX, GLD, IAU)Random Roger: Yesterday I was in Phoenix for a client meeting. In the meeting I was asked about whether I would ever try to seek greener pastures and while the answer is I can’t envision a better scenario than what I have now it got me to thinking about the extent to which investors (including professionals) seek (chase) greener pastures in their portfolios.

This is really about patience and the potential consequence of losing patience. A big part of what I do with my typical day is to try to learn about other people’s process, companies that are new to me, developments in companies we own, countries and themes. Like many people I am interested in getting a little better at what I do and so the overall portfolio approach evolves over time. If you read this site then you probably have some similar interest in learning in the manner I describe.

Prescott%2BValley%2BMotel Chasing Heat (SLV, SPY, NFLX, GLD, IAU)This might be difficult to articulate but the above describes the honing of a process. You probably have some sort of investment process that you have a basis for believing will give you a decent shot of having enough money when you need it. Over time you learn a lot of things about markets and investing and maybe incorporate some of what you learn into your portfolio and so it evolves.

The flip side potentially comes in a year where some particular process doesn’t work so well (no approach to investing can be best for all market conditions) and patience is lost. This is what leads to panic selling and panic buying. An example might be last April with silver. At one point last spring iShares Silver (NYSEARCA:SLV) was up 60% for the year (at that point) while the S&P 500 (NYSEARCA:SPY) was up 7%. Seven percent is pretty good but it’s no 60%.

There was quite a mania around silver (NYSEACA:SLV) at the time, hopefully you remember, and while it seems obvious now plenty of people bought above $50. This repeats in dramatic fashion like blowoffs in things like silver or Netflix (NASDAQ:NFLX) or far less dramatic like canroys or REITs. People get caught up in the excitement, feel like they are missing out but instead of learning about something and then incorporating a modest allocation they end up going too heavy.

Pages: Next

Be kind & share...Share on Facebook0Tweet about this on Twitter0Share on LinkedIn0Pin on Pinterest0Share on Google+0Digg this
.

Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector's Disclaimer, Terms of Use, and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.

Go to Wall Street Sector Selector Home or Check our Special Wall Street News Section

Visit Us On TwitterVisit Us On FacebookVisit Us On YoutubeVisit Us On Linkedin
Make sure you create your redirects.txt file and that it's readable by the redirect script.