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Financial Happenings Blog
Saturday, June 21 2008

A client of ours has referred to us an excellent website from the US - .  The site is published by Merriman Berkman Next, a registered investment advisor based in Seattle.  After only listening to their most recent podcast published on the 20th June I am already a big fan.  The podcast is a weekly radio program hosted by Tom Cock, Paul Merriman and Don McDonald and actually broadcast on a number of US radio stations.  The presenters are entertaining and keep the discussion flowing nicely while providing really useful general investment advice.  Listeners do need to be careful in that the show is obviously very USA centric but much of the commentary is totally relevant to Australia.  Click on the following link to listen to the most recent podcast - Sound Investing Radio Show


Apart from the weekly podcasts, the website also includes a question & answer page based on questions posed by visitors of the site or listeners to their radio show.  There is also a page covering a range of articles.


One particular article on the website that took my immediate attention was "Ten ways to crash proof your investments."  The article briefly set out 10 strategies to avoid permanent losses and crash-proof your portfolio:


1.                   Diversify among many shares

2.                   Diversify across many sectors

3.                   Spread your portfolio across asset classes

4.                   Spread your investments geographically

5.                   Include fixed interest securities

6.                   Consider using a mechanical defensive strategy to limit the size of losses and if you do this be disciplined but don't get into market timing

7.                   Avoid paying unnecessary expenses

8.                   Avoid paying unnecessary taxes

9.                   Don't panic

10.               Don't think you can avoid all risk


We would fully subscribe to all of these strategies except point 6.  We believe it is very difficult, and dangerous, to time markets even using a mechanical method.  A mechanical method is to implement a process whereby you invest in an asset when it is rising and switch to cash when it is falling.  The risk with this method is when assets are falling in price and then being out of the market after an asset turns up again in price. We prefer to recommend holding assets and continue regularly investing over time (often referred to as dollar cost averaging).


That being said the article provides a snapshot of the type of quality commentary being provided on the website.  Well worth a look.



Scott Keefer

Posted by: Scott Keefer AT 11:37 pm   |  Permalink   |  Email
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