Sleepyhead Investing

Are you getting enough sleep?

Photo: Tambako the Jaguar. Source: Flikr. CC-BY-2.0

Most people don’t. Doctors recommend 7-9 hours of sleep for most adults every night, but on average we get about 6 hours. In the early 19th century most folks had to fight just to feed and clothe themselves and keep a roof over their heads. Today, life isn’t so grim. We don’t struggle with starvation any more. Our diseases are those of abundance, not scarcity, and we’re just too busy to get enough rest.

As a result, we doze through life, waking up for major events, like the birth of a child or the Super Bowl. Some of us have an alarm clock to wake us, alerting them to the issues of the day – political, economic, or financial factors that affect their lives. Bill Gross wrote that most active investors have this kind of alarm to stimulate their investment decisions.

But it doesn’t go off at the same time for everyone. Say you’re supposed to get up at 6 am. Some investors don’t even hear the alarm until 10 or 11 o’clock. The day’s half over, and it’s way too late to make any changes to your portfolio. If you’re worried about the dot-com bubble or the housing bubble or South Sea bubble,, it’s already burst.

Other folks wake up way too early. Their alarm is set for 2 or 3 am. The recently deceased Jack Bogle of Vanguard warned about overvaluation in ’97, ’98. ’99, and 2000. Eventually, he was proven right. While those folks were ready for the crash, being too early took a toll as well. Sometimes, by telling you to take refuge in safe investments, the too-early alarm clock is just as bad as a late one. Better to hit the snooze button a few times.

The key is to know what kind of investor you are, to know yourself. No one can time the market perfectly. It isn’t that simple. But the point is to understand your own personality well enough to avoid being way early or way late. Different stages in the market cycle invoke different emotions that will have a huge impact on us if we let them.

No one can control the market. But we can control ourselves. The better we understand ourselves, the better we can act – not just react – when the world wakes us up.

Douglas R. Tengdin, CFA

Charter Trust Company

“The Best Trust Company in New England”

By |2019-01-23T07:54:42+00:00January 23rd, 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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