Article by Oliver GOMM
Spring has arrived. Ending the school year for some. Spring Cleaning. Easter Holidays. Returning the Winter Rental Sports Equipment back to the store.
Warmer winds arrive, Rains too. Get ready for the new shoots to rise up. Perhaps looking back at the commitments we all made in January – Have they worked? Was it as terrible as I thought?
What a great time of year to enjoy and spend time outdoors with loved ones. As the longer days provide more opportunities to be outside, in nature. New skills, New Games, New teams to join and acquaint. Ride a Bike without training wheels, a baby walking barefoot on the grass for the first time, Sweating the pre-season training sessions for the older kids, But no!, surely it’s too early to swim in the lake!
Challenges in the spring markets.
Still, we experience some challenges in the markets.
Central Banks around the world are active to target their respective inflation rates and FX markets react with money chasing best yields or best expected yield. It’s not fair when the market moves against us. In the wrong direction. At precisely the wrong time at much higher magnitude than we expected. But, those responsible have bigger goals in mind than our monthly performance….The solution? Honesty.
When our model says we are wrong, then we are wrong! Cut the loss and move on. There will be other opportunities, but if you fight the market, hand on, insisting ” I am right”, the ego prevailing, then tomorrow won’t come for us portfolio managers, the loss will grow and grow and eventually new opportunities won’t arrive.
You will return to simply studying, and no longer manager of money, on your way back to night school. Redemptions inevitably arrive. Important reminder if some large moves went against you this month.
Tomorrow never arrives
To recover a loss of 50%, you actually need to make 100% to get back to break even. Think about it. The most important part of your portfolio is not your open position …..its the cash you still have left over to deploy. Otherwise tomorrow never arrives.
Now get outside and enjoy the Springtime!
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Oliver GOMM
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＜Website＞Tune Capital AG Group
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