Photo: Janna Michael. Used by permission.
Mountains can be beautiful. But when you go hiking in the mountains, the first thing you learn is to respect them. No one ever “conquers” a peak. Sir Edmond Hillary didn’t “conquer” Everest; Whymper didn’t “conquer” the Matterhorn. The men and women who made these first ascents did something unprecedented, but the mountains are still there.
And what we respect is the mountain’s weather, its terrain, its remoteness, its unpredictability. Mountains have a way of surprising you. Because you’re often far from help, minor issues can turn into major emergencies.
In the same way markets can be infinitely surprising. What should be an orderly process of buying and selling can break down. You can get a “flash crash,” or safe portfolio insurance can cause a market meltdown like October 1987, or market strategies can be whipsawed like they were in December of this year. Markets are always changing, and new ideas create new risks and opportunities.
Respecting markets means working with them, not trying to outsmart them.
Douglas R. Tengdin, CFA
Charter Trust Company
“The Best Trust Company in New England”