Over the last few years, I have spent a lot of time fretting about my financial planning. I have been a pretty passive investor, trying to avoid “churning” my portfolio.
It has, however, become increasingly difficult to eliminate the noise generated by the so-called analysts podcasting and talking about what they know and what will happen.
If you listen carefully to almost all of them, they haven’t a clue what they are talking about. It’s all personal opinion, not backed up by any obvious research or due diligence that I can see. It’s just a bunch of personal opinions from a bunch of analysts who have a platform to yak continuously.
I am listening to a podcast from the New York Times with Ezra Klein, who holds himself out as an expert on everything from politics, science, engineering and finance. It’s maddening listening to this grifter who claims to know everything.
Somehow, I need to eliminate the noise and get to the core of what is important information. It’s not easy. But there is a lot of noise pollution out there that I need to filter out. Somehow, I need to find a genuine source of solid investment information that isn’t colored with personal opinion, unsupported by research or facts. Not easy, and it’s beyond my grasp to do it on my own.
I Wonder
Do you really need to know a lot to be a successful investor? Going back to some of the research that you see floating around, you have to wonder whether it is really necessary. I believe that the days are gone when we could read books like Peter Lynch’s One Up on Wall Street. I don’t believe that in our complex world, this works all that well anymore. Perhaps it does.
Let me give you an example. I bought shares in Costco around ten or twelve years ago. Needless to say, the stock has performed very well, but it has flatlined now with a declining share price and not much going on. Costco is not connected to AI. No immediate interest. Will it recover in the long term? Probably, but I’m getting to the age where the long-term is just not relevant.
What this means is that one thing I need to do is to sit down and re-evaluate my investment goals and objectives as I get older. That will likely result in my being more concerned with capital preservation than growth. In this environment where tech companies rule, it’s hard to have that discipline.
Looking for the next big winner is hard to resist with all the AI companies lying around. But picking winners and losers is a long-term strategy. Hoping the winners will outweigh the losers and that with time, losers will be fewer than winners to make for a winning strategy. I don’t believe that I have the time anymore. And besides, it’s an area that I have some understanding of, but not an investor’s grasp of. Unfortunately, I have become a bit of a dinosaur in this regard.
Next Steps
Next steps will be to sit down and re-evaluate my investment goals given my stage of life and general market conditions. The markets have had an incredible run. Since 2008, anyone who has been patient has been well rewarded with just a few solid AI-related investments. For the others who have looked to more traditional areas such as manufacturing, retail, etc., it has been pretty much unproductive.
Time for another look based on updating investment goals and risk tolerance.
