Investing by Starlight

Every decade or so, a new investment star is born.

Van Gogh’s “Starry Night.” Source: MOMA

In the ‘60s it was growth stocks. In the ‘70s it was gold. In the ‘80s we all turned Japanese. The ‘90s had the Nasdaq. The ‘00s saw China’s growth. And now we have the data giants. Each one of these markets rallied some 10-fold during its heyday. What’s next?

One approach is to look for the asset that no one wants. In the early ‘80s Japan just made cheap electronics and small cars, so why bother investing there? In the early ‘90s no one wanted US stocks – the “rust belt” was over, and California had a perpetual real-estate crisis. And rallies in both Japan and the US started with financial crises.

So which market gets no respect, today? One place to look is Europe. The problems with the Euro are well-known: the industrialized north is growing at the expense of the service-oriented south. And financial, economic, and populist tensions are ripping the continent apart. If the Euro fails, all bets are off.

European Union flag.

But all this is priced in. Sir John Templeton once said that bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria. The best time to buy is when pessimism is strongest.

Douglas R. Tengdin, CFA

Charter Trust Company

“The Best Trust Company in New England”

By |2018-04-17T06:50:01+00:00April 17th, 2018|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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