A “Flywheel” Approach to Investing

By John Reese — Teacher and leadership coach Jim Collins has authored and co-authored six books that delve into the inner workings of corporations and what makes them succeed or fail. One of the many concepts he features in his books, articles and lectures is that of the flywheel: “No matter how dramatic the end result, good-to-great transformations never happen in one fell swoop. In building a great company or social sector enterprise, there is no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembles relentlessly pushing a […]

Being a Successful Investor Requires Planning and Tenacity

By John Reese — In a YouTube video from 2009, Succeeding author John Reed tells his audience that to achieve success, a person must say to themselves: “Here are my strengths and weaknesses and here are the alternative paths I can take to get to my goal. Which path best fits my strengths and weaknesses?” This notion applies to investing in a big way. While setting goals is a paramount first step in any investment plan, you must also be mindful of your risk appetite and align your portfolio accordingly. How will you react to short term market shifts, either […]

In the Hunt for Black Swans, Disciplined Investing Strategies are Best

By John Reese — Imagine a scenario in which you’re unsure about directions, so you ask a friend if you could follow him in your car. He happily agrees, then tells you to turn right a mile before he does. In some ways, talk about strategies to protect investors from “black swan” events–negative occurrences that lead to significant market declines—is similarly puzzling. The term, popularized in a 2007 best-selling book by scholar and risk analyst Nassim Nicholas Taleb, is derived from the once widespread but misguided belief that all swans are white. Black swan events, therefore, are not-so-good surprises for […]

Would You Fire this Guy?

By John Reese — If there’s one thing that’s hard to persuade investors to be, it’s patient. The urge to chase the hot idea or the manager with the dazzling recent track record is incredibly powerful. The resolve to resist crowd mentality can falter when it seems as if everyone else is winning and you’ve been left behind. Imagine hiring a manager in 1997 and for the three year period to 2000, he clocks a gain of 65 per cent. That sounds pretty good, but remember: It was the roaring 1990s, and the technology-fuelled boom was all anyone could talk […]

It’s Time To Get Into The Rebalancing Act

By John P. Reese — If it ain’t broke, don’t fix it can be a useful mantra in many walks of life, but investors should be wary when applying this idea to asset allocations. Movements in the market can shift allocations and result in concentrations that might not necessarily fit your risk profile and/or investment goals. Suppose, for example, you create a portfolio comprised of 60% stocks and 40% bonds. If stocks see a period of large returns and the allocation shifts to, say, a 70% stock allocation, you might consider leaving things alone in the hopes that the trend will […]