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Visionary or Dumb Luck?

Last Friday was my first broadcast of About Money on KKOL 1300 am. This show focuses on giving you a close analysis of current, past, and future market trends. Together we will continue to meet successful business owners, talk to industry experts, and discuss different investment tactics and regulations.

I am a firm believer in strategic investing over tactical. Why? Because tactical investing is like predicting the weather. Is it going to snow? Yes. When, is the question, and I don’t have the answer.

The buy low and sell high intent of tactical investing is attractive. In reality, tactical investing typically leads to buying high and selling low. Tactical investors often miss the best trading days. With strategic investing, you ride the ups and downs, hitting all of the best days.

My belief is based on studies such as Carla Fried’s analysis of the Standard and Poor’s 500 Index (read more about it here) and my own analysis of five of the top investment advisors when I first began in securities in 1986. These men were: Warren Buffett, John Templeton (with the Templeton Funds), T. Rowe Price (with the Rowe Price Funds), Philip Fisher, and Peter Lynch (with the Magellan fund).

While all five men had different approaches to investing, they had one commonality – strategic investing. They were interested in stocks they could hold onto for more than six months. This is my tactic as well.

Successful long-term investment isn’t dumb luck. Companies which succeed are run by visionaries who can look at the future and plan for the bumps and changes to come. Jim Duthie, CEO of Standard Steel Fabrication, showed this kind of vision. During the Great Recession, he refused to lay off employees and continued to make important renovations to Standard Steel Fabrication’s plant. The result? When jobs came, they had the men to do them. When the state issued new regulations for Storm Water Control, their plant was up to code. Jim’s vision for the future and his strategic planning allowed them to weather the down so now they can ride the up.

For more financial planning insights, join me next Friday on About Money.

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