Mr. Market, Benjamin Graham, Better Business Bureau discussed on Money Matters with Ken Moraif


And of course, we are very proud of that. And it is extremely important to us to be ethical and to be fully disclosing everything and honesty above reproach. And we believe that we are fiduciary also as a as a registered investment adviser. But at the same time, this does not mean that the Better Business Bureau is recommending us to be your financial adviser, just so you know, they're just talking about ethics. That's all. But anyway, we are back and we're talking now about our philosophy. So since we work with clients who are primarily as I mentioned retired or retiring soon, we're over fifty our philosophy is that we want to protect principle. I that's job number one for us. And this is actually contrary in in many ways to the notion of buy and hold okay? Because buying hold says that you have diversified portfolio of quality investments, you rebalance them maybe prianti to keep them in the risk profile that you're supposed to be in. And then your job is done. We'll see the problem with that is that if you have a bear market such as two thousand eight or y two K and many others, then you're violating the rule of rule number one. Which is dull lose money, right? Protect principle. You're violating that rule. And that's a real we have. And so therefore, we believe that you should have a strategy of buy hold and protect okay? I believe there is no doubt. So you want to protect your principal. And you know, one of the things that is always very nice for me is when somebody who's way smarter way better at all this stuff, and I'll ever be agrees or has agreed to it to what I our philosophy. Right. And so one of the things that we have all of our advisers, go through is the charter retirement planning counselor designation. Okay. We went are we put them through that professional designation, which is to be a retirement planning counselor to be chartered in that in that regard. And so I'm going through the program myself, and one of the things that I came across was this discussion about different investment, philosophies that are good for retired people and one of them that I came across was exactly what we talk about. And I was like, well, this is really cool. So this is Benjamin Graham, okay? So Benjamin Graham is the father of modern soc-. Curie analysis and his a lot of the things that he came up with are still used by a lot of money managers today. And so he he actually was born in eighteen ninety four died in nineteen seventy eight. And he was the leading contributor in. I'm reading here from the college of financial planning chartered a consultant retirement planning counselor booklet, but Benjamin gray was a leading contributor to the science of investing. He he entered a field where decisions were made on the basis of dubious tips hearsay inside information, and intuition and left it with a methodology worthy of true, profession Graham, not only developed the unethical methods of modern security analysis used throughout the investment industry, but he pioneered the strategy of value, investing and Graham was extremely careful and thorough investor and he held safety of principle as the first requirement protect principle. I after that, you can do whatever you want. But that's the first one. And so he also, and I really find this to be interesting. He he there's a parable here that I wanna read to you Graham, use a parable of Mr. market too ill. Straight the importance of his philosophy. Okay. So in the example, that he used the stock investor is a partner in a business with other partners. One of whom is Mr. market, Mr. market can be very emotional and subject at times to extremes of euphoria and depression. I would say that's true. Each day. Mr. market offers the investors opera tuneD to buy or sell the investors stock to him. Sometimes Mr. market is your fork and some and therefore will trade the stock at a very high price to his partner. The investor at other times, Mr. market is very despondent. And we'll trade the stock at depressed prices much below its true value, Mr. market does not care if he takes advantage of the investor nor does he care if the investor takes advantage of him. It is up to the investor to understand these mood swings and used them to make smart profitable trade with Mr. market. Okay. So that's Benjamin Graham, and that is what we believe is. Well, our belief system is that you need to be aware that Mr. market can become very depressed. And when Mr. market becomes depressed. He goes way way down as in SNP down fifty seven percent in the talk market crash of oh eight and forty nine percent in Y two K and other times, you know, we had. Big drops. And when Mr. market is depressed, you need to not be in the market taking a beating when that's happening. That's. It is very interesting. That's why we believe you should have a buy hold and protect strategy to get out when Mr. market is depressed because why rule number one don't lose money. Am I alone on this? Does anybody agree with that? So if you're retired or retiring soon, I think it is so important to preserve your principal. And we talk about it a lot on this show and with our clients, and that is that the five years before.

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