Abstract Markets

What do you see?

“Police Gazette,” by William de Kooning. Source: Wikipedia.

Abstract expressionist art demands as much from its viewers as it does of the artists who create it. It’s emotionally intense, and tries to capture the “spirit” of the subject, rather than particular details. But the artworks are open to a lot of interpretation. Reality can seem obscure and difficult to elicit.

One of the most important such artists of the 20th century was Willem de Kooning, a talented painter who came to America as a stowaway on a British freighter at the age of 22. He lived and worked in New York City, and his paintings often show a great deal of energy. His painting “Police Gazette” originally sold for $37,000 in 1965, but became so well known that a Swiss art dealer paid five times that price just 8 years later. The price has since skyrocketed, and the work was purchased by a private collector in 2006 for $63.5 million.

Markets often resemble abstract art, in that they offer a little bit for everyone. Bears can look at a price chart and see the market rolling over, breadth declining and trendlines broken. Bulls look at a market near its all-time highs, that doesn’t seem to react negatively to negative news. Both have their points, but if you try to reconcile them, you’ll twist yourself into knots.

S&P 500 fund. Source: Finviz.

That’s why it’s important to invest strategically. If we just look at the latest news, we’ll never put our money to work. There’s always a war or controversy or political turmoil somewhere, putting the global economy at risk. But our personal circumstances don’t change all that quickly. If we’re thoughtful, we’ll have enough time to plan if, how, and when we need to make any changes.

Abstract expressionist art has enjoyed tremendous popularity, lately, especially early artists like de Kooning. His artwork has appreciated significantly, by over 18% per year in some cases. This is similar to the returns of the most successful tech companies. Sometimes, revolutionary approaches to current issues can be extremely profitable.

Douglas R. Tengdin, CFA

Charter Trust Company

“The Best Trust Company in New England”

By |2019-09-09T06:51:34-04:00September 9th, 2019|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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