Author: Dan Plettner
I suspect 2011 will be remembered as a year when some so-called experts’ egos too often got the better of them.
For the first seven months, the reasons to be more heavily invested were easy to find. Managers were putting idle cash to work at ever increasing prices. When the pullback entered bear territory, the same experts were advocating “risk off” trades - just in time for a fierce October rally.
By the end of October, positive momentum and the underinvested backdrop had plenty of folks anticipating a melt up in asset prices. Again, conventional wisdom proved wrong.
Trying to trade in and out of the broad market is not something I seek to do. I’ll leave that for folks who think they are smarter than the market. While I find promise in late November’s bounce initiating from higher levels than the October run, I do not believe anyone (myself included) can expect to anticipate the broad market’s direction.
With modesty, I continue to focus on my own discipline as it applies to any style (core, MLP, Long/Short, etc). I attempt to achieve my exposure to risk assets with Closed-End Funds and other securities where I aim to observe catalysts that can help achieve relative price outperformance. I embrace asset price volatility within my strategy.
I prefer and anticipate a rising tide that would lift most ships, my vessel included. Still, I’m going to measure myself on how well my vessel performs relative to other ships.
Happy Holidays to all!