The Competitive Edge (Part 4)

Everyone’s looking for an edge. How can you be sure that you have one?

There are three roads to outperformance: working harder, working smarter, and working calmer. Working harder is a simple notion: do more research about stocks, bonds, and commodities than others, and apply this knowledge to your portfolio. It’s simple, but it’s not easy. It requires more reading, more phone calls, more meetings, and more effort. It can be physically challenging.

Working smarter requires a deeper understanding of the way the world works. Competing this way requires you to reflect deeply on how and why people behave the way they do. These investors are sometimes called financial philosophers, and philosophical concepts tend to dominate their thinking. They can often see a social trend before it emerges. It’s intellectually hard.

Working calmer requires you to keep your head when everyone around you is losing theirs. It sometimes means that you have to get away from the financial centers like New York or Chicago—or sometimes just not answer the phone. It means that you often have to do the opposite of everyone else, selling when markets are exuberant and buying when they seem depressed. It’s emotionally difficult.

Hard work, smart insight, and a wise temperament aren’t easy. But they’re the only way I know to maintain a competitive edge.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By |2014-09-11T09:47:31+00:00October 27th, 2011|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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