One of the frustrating facets of any crisis is the opportunity they offer hacks and charlatans to have their moment in the sun. As famed journalist Hunter Thompson once said, “when the going gets weird, the weird turn pro.”1 After years stuck in the penalty box, all the talking heads who have been painfully wrong for years become hot media properties. It’s easy to understand why; reporters get tired of writing about money-losing strategies, even if they’re based on careful research and might only need a little more time to work out. In fits of desperation, they start pulling out some really strange ideas that, like the proverbial broken clock that’s right twice a day, happen to be working well at the moment.
Yes, I know the market has been doing well. Hopefully, by the time this article goes to press, Congress and the President will have reached a deal that will keep people in their homes, our children fed and offices with lights that still turn on. But it’s also earnings season and that is bound to bring out some surprises about consumer demands and the costs and fears of doing business in a pandemic. But even the market’s rise has proved mystifying. The pandemic has reaccelerated, yet the market’s no longer reflecting a higher risk of the economy needing to shut down. It’s possible that, in our never-ending quest for something new, investors have just tuned out the pandemic as background noise.
But investors are reaching for answers, and that’s what the professional weirdos have been waiting for. There are market strategists who use astrology, portfolio managers who’ve always bet against the market and even the lucky folk who just happened to put all their money into Apple or Amazon and held on. They’re newsworthy because, in spite of their flawed philosophies, they happen to be up big and they have the most colorful quotes.
That makes for fun reading but poorly constructed portfolios. I don’t need to point fingers at who I’m thinking of. You’ll recognize them by how short of a time their winners span and how odd their reasoning sounds once you take a minute to examine it. Remember, we rarely hear about all the strategies that went belly up.
Does this sound like a rant against people who are making mad stacks because they might be smarter than I? Maybe. Yet experience has taught me that the market swings dramatically but, like a drunk stumbling home after a big bender, eventually gets it right. It’s those swings, both up and down, that test us and sort out the players from the posers.
I constantly must deal with people who claim winning track records or brilliant ideas that ignore well established investment tenets. That’s fine; it comes with the territory. I won’t argue with them; it’s pointless. I tell them they can have their winners all to themselves. They have their process, I have mine. My strategy does not incorporate selling tech stocks when Mercury is in retrograde and chances seem pretty good yours shouldn’t, either.
Evan R. Guido is the Founder of Aksala Wealth Advisors LLC, a 2018 Forbes Next-Gen Advisors List Member, and Financial Professional at Avantax Investment ServicesSM. Evan heads a team of retirement transition strategists for clients who consider themselves the “Millionaire Next Door.” He can be reached at 941-500-5122 or firstname.lastname@example.org. Read more of his insights at https://finance.heraldtribune.com/category/ask-guido/. Securities offered through Avantax Investment ServicesSM, Member FINRA, SIPC. Investment advisory services offered through Avantax Advisory ServicesSM, Insurance services offered through an Avantax affiliated insurance agency. 8225 Natures Way Suite 119, Lakewood Ranch, FL 34202. The views and opinions presented in this article are those of Evan R. Guido and not of Avantax Wealth ManagementSM or its subsidiaries.