Ready, Set, What?

How can we be ready for what comes next?

Photo: Russographer. Source: Geograph.ie. CC BY-SA-2.0

“Be prepared” is the Boy Scout motto, and it’s good advice if we’re headed into the mountains. We need to be physically ready for challenge of the peaks – core body strength, cardio-vascular endurance, and mental focus. We need to have adequate clothing and emergency supplies, like a headlamp and compass. And we need to know the terrain and trails we’re headed into. Maps, guides, and experienced friends help us understand where we are and what surprises might be around the next bend.

Investors need to be ready for what the markets might throw at them as well. Research, documentation, and mental preparation are critical to dealing with the inevitable surprises that markets send us. Researching investments takes time, but it’s worth it. If we understand what a business does and how it generates its cash, then the markets’ gyrations are less likely to cause us to panic.

Documenting our decisions is also a great defense against second-guessing ourselves. Going back to our files to see why we did what we did when you did it will helps us learn about both the markets and ourselves. And understanding ourselves is the real key to investment success, or success in any field, for that matter. Recognizing how much risk we can take and other limitations is an ongoing process – and the way we prepare mentally for the markets.

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With preparation, market volatility can become opportunity. Without preparation, it can lead to permanent losses. The difference often comes down to us.

Douglas R. Tengdin, CFA

Charter Trust Company

“The Best Trust Company in New England”

By |2019-05-13T05:30:13+00:00May 13th, 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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