| INSIGHT | COLUMNS & GUIDANCE On the Financial Path: A Market Analysis by Bo Beckman Energy. The market as artificial as it may seem, is a living breathing entity. The energy that is released by the market is the result of two energies colliding. Investors channel their energy to manifest a positive result, a gain. The market releases its energy for the same, a gain. Both sides want the same thing, and inevitably, one will gain and the other will not. Investors have come to believe that the market exists in order for them to profit; to make money. They can be owners in major corporations and reap the rewards of a growing economy. The market, however, is the "Great Humiliator." It attempts to take as much, from as many, for as long as it can. It is this different channeling of energies that manifest the confusion and uncertainties that perplex the investment community. The investor is looking for one thing and the market another. Now throw in the economic environment and political philosophies and you have a witch's brew, each with its own agenda and expectation. So what is an investor to do? Here are a few simple tips that should help in seeing your way through the fog: Expectations -- Establish the appropriate expectation relative to the conflicting of interest. Do not expect, despite the need to satisfy your ego, to outperform the markets by wide margins over the long-term. Instead, be humble and understand that kindness and patience will pay "dividends" over time. Expect, over time, to outperform the markets by a little, net of fees, with less volatility (lower standard deviation). Clear the noise -- Understand that all information you gather from various public financial mediums is already discounted in the market. Turn off the TV in your mind, be still, be silent and listen to the inner voice. Focus on the fundamentals. Grow Up -- When errors are made, and there will be many during your investment travels, do not judge. Change your pattern of accumulating pride and shunning regret. Instead focus your energies towards accumulating regret and shunning pride. When the darkness comes, don't fight it. Accept it with an open mind and heart and listen to it. You can learn from it. It teaches you what not to do. Do not blame the other sources -- the government, your broker, the economy, the stock, etc. Accept the error as your own and grow from it. We are blessed with choices, and when faced with adversities, we embrace them and learn from them. From this you will grow -- and so will your portfolio over time. Discipline -- You will know when you have reached a level of understanding in your investment journey. Follow that path. Some call it a "gut feeling," others refer to it as a certain level of consciousness...whichever it is for you, follow it. It is the light that emerges after you welcome the darkness with love and patience. Walk with the light. There is no need to run, for it is not going anywhere. Let it set the pace. In time, you will find enjoyment and rewards in the market. If there are specific questions you would like addressed in this periodic column, please forward them to: Edge Financial Path, 15580 Andrie St. NW, Ramsey, MN 55303. Bo Beckman is an executive at one of the top private portfolio management firms in the United States. He has served as a senior consultant and portfolio manager at the largest brokerage firms and banking institutions in America. He is the author of What They Don't Know Just Ask Them, and he is currently working on his second book, The Path Less Traveled. Copyright © 2001 Bo Beckman |
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