Investing in a world of intervention
I am not sure what makes people believe that the action of turning the calendar to a new year will act as a “magic bullet” for them. I have to admit to having my own New Year’s Resolutions over the years – typical promises to myself to lose weight, spend more time with family and friends, etc, etc. I don’t know anyone that, as the ball falls in Times Square each year, has not had a resolution to make things better for themselves. Yet, lo and behold, when we wake up on January 1, not much has changed, right? The thoughts of resolutions start to fade into the distance and most folks revert to their ways of old. Present company most definitely included!
When the history books are written, 2008 may very well be remembered as, “The Year of Intervention”. For those that have read some of my previous pieces, I may seem a bit whiny or frustrated, and indeed you would be correct! Winding one’s way through this market and economy is challenging enough without daily/weekly interruptions and interventions from Governmental and quasi-Governmental authorities (the Treasury Department/Federal Reserve), but when we introduce the constant interventions/interruptions, we are being asked to change our behavior as investors. Therein is the most problematic issue for investors these days, and what might explain the daily volatility of truly historic proportions that we have experienced of late.
Simply put, free markets are no longer free; rather, they are markets that have outside influences that seem random and deem our heretofore disciplines moot. Rather than whining, we must ask ourselves, how do we, as investors on our own behalf, or those working with other people’s money, react to these outside influences?
Click here for Bennet’s full report.
* President of Atlantic Advisors Asset Management, Bennet Sedacca brings with him more than 26 years of securities industry experience. From 1981 to 1997 he worked for several major investment banks, specializing in high-grade fixed-income securities marketing, trading and portfolio management. While working for PaineWebber as a Senior Vice- president, Bennet was a member of the Chairman’s Council for four consecutive years. During his years with Salomon Smith Barney as a Vice-president, he established an institutional fixed income presence in Central Florida.
In 1997, Bennet formed Sedacca Capital Management focusing on portfolio management for high-net worth individuals and small to mid-sized institutions. He is also a contributor to the financial website, www.minyanville.com and is regularly quoted in Wall Street Journal Online, Barron’s and Bloomberg.
Bennet graduated from Rutgers University in 1982 with a degree in Economics and was a member of the International Honor Society of Economics.
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