Looking Ahead

 “The reason I score so many goals is that I don’t focus on where the puck is but where it is going to be.” – Wayne Gretzky, Hall of Fame Hockey Legend

Looking ahead instead of looking behind is good advice for hockey players but essential for successful investing. Both participants skate on thin ice but at least hockey players play on a smooth surface and where the puck usually bounces off the boards in a predictable way. Investors live in a less predictable “rink”.

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Trade-offs

“Capitalism is inherently disinflationary and leads to cycles of boom and busts”.  – Keynes’ General Theory of Employment Interest and Money

Uncertainty is a natural part of our world touching all aspects of life – from birth to death, from buys to sells, and everything in between. Lately, uncertainty hasn’t been this high since tomorrow – to paraphrase a term used in March, 2009. After a 12 and 14% third quarter drop in the DJIA and the S&P 500 index, respectively, it is not extraneous to remind ourselves the purpose for investing surplus money (amounts that exceeds our current lifestyle needs or desires). Generally, we save so that we can afford to buy, give, or pass along sometime in the future a greater amount than we can today. By investing those savings now, we aim to have a greater real amount (after inflation and taxes) in the future as well as be compensated for the risks (uncertainty) of investing the money for some time.

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