Written by Dean Moser

There are only a few things that guide all of my dealings with investment markets and client accounts. These can be considered my core philosophy for investments. I would like to share just two of them in this treatise.

First, there are no emergencies in the market. It must be understood that markets are generally and openly emotional indicators for very large groups of people. The value of any single investment has less to do with its fundamental values as with its emotional connections in the market. This swaying of emotion is indicated in “trendlines” and general market directions. While, at times, they seem to be rather erratic there is always a larger general trend they are a part of. That larger trend is more reasonable and stable, and thus, if you attempt to move based on what seems to be an emergency, you will most often be contrary to the general trend. Certainly it looks like emergencies are happening all the time, the reasonable move is to pay attention to the larger trends, and operate with calm confidence.

Second, Modern Portfolio Theory is not a professional theory. I fully support this theory for what it accomplishes and represents, in lowering volatility of a portfolio. Though the application of it has become far too expansive. I stand on the premise that you should never hire a professional advisor that subscribes to this theory for their investment practice. The Theory exists to assist amateurs in the market in smoothing out their ride, and is excellent at that task. Why would you pay a fee to an advisor that will only sit on the couch with you and watch your investments accomplish their “average” run in the market. Investments in an asset allocated portfolio along these lines was designed for individuals, not professional advisors. If you agree to pay an advisor for their management of your accounts, they should bring actual professional advice and strategies to your attention that you would not be able to accomplish on your own.