Whitewater (Part 3)

We’re in a period of extreme volatility right now—what I call “whitewater investing.” And whitewater investing calls for whitewater rules.

Rule number three is to work with a team. Calm markets and calm water allow you to work by yourself. But when the water starts to roar you need to have a team you can trust, especially if anything goes wrong. For example, taxes aren’t much of an issue if you can invest and hold on for decades. But when you need to make adjustments in volatile times, tax-planning is critical.

Likewise, custody was an unimportant detail until a little firm named Lehman seized up. Then investors that had accounts with Lehman couldn’t get to their money for weeks. And investors that didn’t pay attention to fine print that allowed advisers to substitute “cash-equivalent” Auction Rate securities got a rude awakening when they couldn’t use their cash. Knowing how the brokers were paid might have helped those investors understand why they owned those bonds.

Teammates matter. Details matter. Motivation matters. Having a team that you can depend upon is critical as you move through turbulent markets.

Douglas R. Tengdin, CFA
Chief Investment Officer
Hit reply if you have any questions—I read them all!

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By | 2014-09-04T14:49:06+00:00 November 18th, 2008|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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