What are your thoughts on timing the market? How do you know when to reduce or increase your investment level and/or change philosophy?

As Larry first heard in a 1968 lecture at The New York Institute of Finance, “The most difficult issue you encounter in investing is knowing when to sell.” Fifty-seven years later, this remains one of the most topical issues we face.

The best way to know when to sell is to select criteria and the thresholds where you will buy and sell. Sounds like work. That’s probably why Investment Advisors exist. The goal of most other advisors is not to beat the market but rather keep their clients from selling out in a panic. Two tools they use are: reducing volatility by adding bonds to portfolios and explaining that the biggest gains in portfolios occur just days after the worst declines.

Our goals are different. We want to outperform the market substantially with safe quality securities. The fact that this is our fifty-eighth year indicates that this approach works. There is a price clients pay for this success, and no, we don’t mean fees. Our fees are one percent, the same as the average advisor’s. The price a client pays for success is the volatility of the portfolio. We sell securities when the security data says sell, not when there is an election, market noise, or bear market. When the market declines, we decline. That is uncomfortable. That is the price you pay to substantially outperform the S&P 500, the S&P 1500 and even the glamorous speculation of the Nasdaq QQQ over the long term. All after fees.

As we continue to navigate a dynamic and uncertain landscape (although we suppose there is no such thing as a “certain” political, economic, or market landscape), we understand that it’s easy to feel unsettled by the headlines and market fluctuations. We get it – the news has been unpredictable lately. While it might feel like the world is spinning a little faster than usual, this volatility is something we are used to and plan for.

Our process allows us to find comfort amidst discomfort. We build our research around defined and proven factors and trust that process. One of the most difficult and important aspects of investing is eliminating bias. There are many types of bias above what you may be thinking. Some examples include: the bias to hold losers as to not admit defeat, the bias to sell right when a stock turns positive, the bias to anchor to some price point that is no longer relevant, and the bias to avoid a volatile yet positively skewed investment because the fear of losing is greater than the joy of winning.

We work to remove biases by trusting our process. Our firm’s approach is to invest for the long-term based on data and analysis, not speculation or emotional responses. The truth is, timing the market is far more difficult than it sounds. The data indicates that in the long-term trying to add or reduce funds at just the right time is not a successful approach. The most beneficial approach to timing the market is… time in the market.