After a brief hiatus, I will renew The Financial Passage Maker via e-mail and postings on this blog. I am now resuming the "hunt".
A three week bicycle trip through some of the more depressed areas of the eastern U.S. has confirmed my impression that the American economy is improving. As a result, I have renewed my search for investments, especially along the themes of infrastructure renewal and manufacturing with an emphasis on small companies.
During the bike trip, I got to meet a wide variety of people, mostly in small towns and villages. Many of them had suffered from the hollowing out of the manufacturing sector, the dislocation caused by the machinations of Wall Street operatives, and 9/11.
American people are tremendously resilient.
In almost all instances, people did not feel sorry for themselves or consider that they were "entitled" to state benefits. Instead, they economized, scrambled by working at whatever they could and learned new ways to make a living. Many of them were by no means well off, but there was a tremendous element of pride and, above all, self reliance and a sense of community. This bodes well for the country. From waitresses and hotel keepers, to farmers and roadside workers and retirees meeting to have coffee in the early morning, there was a sense that things are starting to improve. Now, if only the rot at the top of the system could be addressed ....
While the hunt for new investments is exciting and often rewarding, the greatest financial rewards are achieved by establishing a strong strategic base: a financial plan (which has been addressed in earlier editions of The Financial Passage Maker) and prudent asset allocation (which some people contend is more important to portfolio performance than stock selection).
Much has been written about asset allocation, most of it in eye glazing prose. Here is one treatise which is well worth reading. Make sure to follow the internal links for more detail.
http://www.marketwatch.com/story/the-ultimate-buy-and-hold-strategy-2013-07-17?link=MW_story_popular
By following the basic guidelines Merriman sets out, the average investor can, in most instances, "do better" than most fund managers or financial advisors ... IF ... he/she has the self-discipline to be undeterred by the lagging performance of some asset classes in their portfolios.
The American Association of Individual Investors offers some useful insights into asset allocation - this in addition to some great stock screeners to assist with the selection of equities. I joined several months ago and the membership has been worthwhile in many ways. http://www.aaii.com
A few remarks on my recent cycling trip with a old canoe buddy. After more than 30 years of annual spring canoe trips, we decided to do something different: take a three week cycling trip. We flew to Washington DC and cycled north along the Chesapeake and Ohio Canal. It was pure bliss, cycling through a wooded corridor carpeted with spring flowers ... and no cars as the towpath was restricted to non-motorized traffic. We had no final destination in mind (could have been Chicago, Kansas City .. anywhere). Upon learning about massive flooding along the Mississippi system, we decided to continue northward from Cumberland, Maryland to Pittsburgh along the Great Allegheny Passage, a spectacular rail trail. We gradually made our way to Kingston, Ontario by following the shorelines of Lakes Erie and Ontario for a total journey of 800 miles. We decided to make a bike trip an annual event.
The C&O Canal is especially well suited to family travel and leisurely cycling as the towpath is level and well sheltered and served about every 15 - 20 miles by towns with services and accommodations which cater to cyclists. For more information you can look at these sites:
The Rails-to-Trails Conservancy is an American non-profit organization which promotes the development and use of rail trails. Its site is very rich. Whatever some people may think of George Bush Jr., during his era a tremendous amount of funding went into cycle trails as a natural outcome of his personal interest in mountain biking. (At least that is what a Democratically inclined cycle shop owner told me ... he sold a mountain bike to one of JW's body guards.)
No comments:
Post a Comment