As anyone who has read Blueprint insights over the last few years knows, we believe in two types of diversification. First, asset diversification is a keystone of investing and we embrace the benefits. Second, we add time diversification using trend following techniques to mitigate the vagaries and cycles of markets. Why? Because, historically, when given enough time (say 20 years), asset diversification (buy and hold) has been almost unbeatable. However, humans do not naturally invest or even think that long term and struggle with staying the course when the market inevitably course corrects either in a short-lived correction or sustained drawdown. This in turn reduces the probability of achieving their long-term financial objectives. Please allow me to elaborate.
Topics: Systematic Investing
Here we go again. All the market analysts and prognosticators have been forced by convention to rub the old crystal ball and suggest they can predict the future for the next year. They even make fun of themselves with clever art that illustrates the lunacy of the exercise – such as below. Given the fact that predictions are merely educated guesses, why does this ritual occur every year? Attention? Arrogance? Or is it a component of the human emotional bias that drives the markets overall?
Topics: Behavioral Finance
Now that I have your attention - who really thinks they get enough sleep? Many CEOs now indicate adequate rest is critical to their success! Who prioritizes rest over work or even exercise? For years, I have been obsessed by my sleep, or lack thereof. Recently my wife and I had the privilege and the pleasure of hanging out over cocktails in Laguna Beach with our new friend Dr. Michael Breus, Ph.D., known internationally as The Sleep Doctor. According to Dr. Breus, how you manage your sleep is as important as how long you sleep! This is called sleep hygiene. Read on to learn what else I discovered.
I returned from a nice long visit to Paris last week, relaxed and without a care in the world. Then I read the news. Yesterday, an investment banker told me he was worried about the Four T’s - Trump, Tariffs, Trade and Turkey. Blueprint is not a macro firm and makes no economic pronouncements, but if your investment portfolio has been riding the wave of up-vol and peak beta (yes, volatility goes in both directions), it is time to make sure that your portfolio includes strategies that will buffer the down-vol, because it is inevitable. A former colleague likes to call these “shock absorbers”. Have you ever ridden in a car without good shocks? It is not comfortable.
Last May’s blog, in which I shared our observations about the Robo industry, if you can call it an industry, is proving to be on target. You cannot charge a fee for something that should already be free (Beta), and ignore the one thing that you can charge for, advice and a human touch! The list of robos in the graveyard is the proof.