Views from the Crows Nest: July 2013 Issue

Welcome to the July edition of Views from the Crows Nest.

Calgary summers are short, and so this edition will be, too.

Too much of almost anything is bad for us, including essential elements of a healthy lifestyle. Food, drink, sunshine, and exercise in moderation are excellent, but in excess they can be destructive.

The same holds true of information consumption. In respect of our investment portfolio, the mainstream financial industry would have us believe that more information is always better. The typical hooks that broader media use include: conflict (very polarized market opinions), celebrity (what the richest and famous Wall Street types are saying), fear of missing out on gains (greed), and fear of losing capital (this is the big hot-button).

This is all designed to get the viewer addicted to the powerful narcotic of “sensationalist stimulation,” so they can charge more to the advertisers whose commercials you see – many of them disguised as interviews. It’s about the network’s and the advertisers’ profitability, not the viewers’ investment performance.

Viewers are unwitting pawns in their chess game. To be frank, mainstream financial journalism is an elaborately designed, ego-based manipulation of human weakness. Yes, that’s how I really feel, and it feels good to say it so directly.

From my view up here in the Crowsnest, it’s painfully obvious that mainstream financial media offers exactly 0% of the Daily Recommended Allowance of the nutrients that lead to health, happiness and prosperity. However, there’s a simple practice that is both a “super-food” and a great antidote.

In addition to lowering stress and enhancing numerous positive things in our lives, Mindfulness also happens to lead to better decision-making. It’s difficult to be Mindful when you are immersed in the minutiae – whether it’s markets or anything else. Even the scientific community is starting to figure out what the great wisdom traditions have known for millennia. Click here for a TED Talk on the subject.

As this is written, equity market participants are once again euphoric, fundamental valuations are stretched, and big picture technicals are flashing warning signs. Markets don’t care if you bought recently, only you do.

So, if you are still invested in long positions, please be Mindful of the risk you are assuming if you choose to do nothing. Are you more concerned about “being right” about when and what you bought, or are you laser-focused on “getting it right” by managing your downside risk?

There is a time to buy, a time to sell, and a time to do nothing at all. My suggestion is that you mindfully consider your personal priorities again, take specific actions that are consistent with your priorities, then sit back and let things unfold while you enjoy the rest of our brief but unusual summer weather.

Patience and Discipline are accretive to your wealth, health and happiness; Fear and Greed are destructive.

Cheers,

Andrew H. Ruhland, CFP, CIM
President, Integrated Wealth Management
Portfolio Strategist, ETF Capital Management