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June 4, 2012

Investment approaches can be found in unexpected places

Chuck Jaffee’s June 3rd column in Market Watch from “The Avengers”, the latest superhero flick.  A summary ofis comments follows:

Like a superhero investors need to other understand their enemies.  Investors need to recognize what is scary.  It is important to stay with an investment philosophy and recognize “the bigger picture.”  A strategy can be fine-tuned rather than abandoned.

“As an investor, even if your core strategy is working, think about how to supplement and add to those basic tactics so that you have more weapons in times of danger and opportunity.”  Different changes maybe appropriate without abandoning e overall strategy.

“Most investors simply ignore what they don’t know or aren’t comfortable with. It’s why their portfolio has holes in it, or why their asset allocation is only in categories they are comfortable with. They invest in a way that says “If I don’t know the name of something, it can’t possibly be right for me.”

“Whether an investor needs to buy mutual funds or hire a financial adviser or simply do an evaluation that shows where their strategy has holes in it that need to be patched, it is important to find out where you are vulnerable before the market finds your weaknesses and turns them into personal traumas.”

Always “…expect the unexpected.”  ” An investor who builds an emergency plan — including savings to help tide over the rough patches — is anticipating both the dangers and the market cycles that lie ahead.”   
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