BACK • 
Our Fast Food Mentality
As with almost everything, too much of anything can be bad. Such, I think, is the case with information today. For the average saver and investor, and even the average investment broker, we have too much information coming at us too fast. We live day to day, minute to minute and report to report. We jump to hasty conclusions that may be reversed in a day or two, and to be more successful, I think all of us have to slow down and stop investing on a minute to minute basis.
Many in the investment world have developed a fast food mentality, jumping from one hot rock to another, and sooner or later they slip and fall. A year ago, everybody had all the answers and needed no handholding or professional advice, and many were making money, at least temporarily, hand over fist. Today it is a quite different story. Many of the fastest movers, yesterday's hotshots, have been left in heap. This is not to suggest that long-term investors haven't been roughed up as well-we have. But clearly, the lesson of the last year is, as my partners and I have contended for several decades, that long-term investing is really the way to go, and it is a mismatch when you pit yourself against the herd on Wall Street. The best answer for most savers and investors is to give their money to some of the world's best investment advisors, and let them manage the money.
How is that accomplished? Again, as my partners and I say, "Invest an hour in yourself." See a full service investment professional somewhere. Let them get to know you; what are your investment objectives? Your risk tolerance? Your time horizons? Armed with that, rather than letting yourself and the broker try to decide which is the "hot rock pick to click" right now, you should give your money to top notch mutual funds or variable deferred annuities, who in fact have some of the best investment minds in the world, and whose job it is to run your money on full time basis.
That's one of the big problems. In this information age, the amateur (if you're not licensed and in the business, you are an amateur) simply cannot compete against the professionals. First there is this problem with information; it is a problem. There is too much of it, and it's hard to figure out what information is meaningful and what is "applesauce." Beyond that, how can you compete with the professionals when you are doing your own job 40 hours a week? Don't try to tell me that you can spot the investment professionals' own 40 hours a week, and still beat them. I simply don't believe it.
If you're retired, you may say, 'I could spend that 40 hours a week that the professionals spend.' On the surface, that is true, but are you willing to spend the hundreds of thousands of dollars that the professionals spend on software and computer equipment so that they can analyze the information and draw reasonable conclusions? I doubt it. Beyond that, do you really want to spend your retirement sitting in some brokerage office or in front of the television watching little numbers fly by? That doesn't sound like retirement to me, it sounds like a job.
That said, where are we now? I have maintained repeatedly in this space that we are in an economic slowdown, not a recession. That, by the way, is what the Fed Chairman also thinks is going on. In fact, he testified just a week ago before Congress and said two important things: first, that the big drop in December's economic numbers DID NOT follow through in January, and things seemed to have plateau-ed. Second, he repeated that the Fed is very vigilant and ready "to do whatever it takes " to prevent our economy from going into a recession.
When you add the Fed's commitment to the upcoming tax cuts we are certainly going to get, history tells us that, six to twelve months later, stock prices are usually higher. Until somebody comes up with a better idea, my partners and I continue to bet on history, and I think you should too.
At the bottom line, even if I've said it before, I think it's worth saying again; "Ignore the gloom and doomers, a slowdown is not a recession, Mr. Greenspan does not want his long-term legacy tarnished, and the market will probably do better this year than most people expect."
(Tom Butenhoff is a First Vice President with J. E. Liss and Company, Inc.
in Milwaukee. The views are his, and not necessarily those of Liss
Financial Services or the Job Connection/Hiring
Network.)