by Glenn Cunningham
“Abnormally good or abnormally bad conditions do not last forever.” – Benjamin Graham
A lot of talk about the U.S. stock markets is taking place lately. Discussions are focused on how far the markets have risen since their bottom in 2009. Many are asking how much higher the markets will go. And for those expecting a decline, they wonder how far they could go down.
If markets moved perfectly, they would move like a market clock: We could buy at 6:00 when investments are cheap and sell at 12:00 when investments are expensive. It all sounds simple in theory. But, it is not easy to perform.
Markets do not move perfectly and emotions can get in the way. So, trying to manage investments through ad-hoc observations, like relying on a market clock and guesses, is not without its problems. So, what do you need to do?
In short, you need an investment process. Define the parameters you will use for entering, monitoring, and exiting your investments. Stay aware of discussions about market valuations, and ask yourself: What is the market outlook? What is the outlook for my investments? Are they expensive or cheap right now? Do I have a plan to safeguard my money? If you are not sure of the answers, you should seek professional advice.
At GC Asset Management, rules based investing is our hallmark. Our equity investments include ETF and stock strategies that follow a stringent process. We start by screening and ranking equities for investment selection. Then we continuously monitor the strategies using risk control measures to minimize drawdowns. The ultimate reward is low turnover that minimizes trading costs, low drawdowns, and exceptional returns.
Don’t make guesses with your investments. Put a plan in place for your financial success and peace of mind. You probably would not enjoy revisiting the types of declines from 2008 and 2009. If you have questions or concerns, contact us for a complimentary consultation.
Glenn A. Cunningham is a CERTIFIED FINANCIAL PLANNER™ professional located in Temecula. He is the owner and President of GC Asset Management, a Registered Investment Advisor that specializes in Wealth and Retirement Strategies. For more information visit www.GCAsset.com or call (619) 356-8810.