Jumping in TandemSubmitted by Mission Financial Planning on September 9th, 2012
A client e-mailed me about the market, worried that he needed a parachute for that day’s free-fall. My reply was to not worry too much, he was “jumping in tandem” with an experienced jumper (his money manager).
Investors picking their own stocks and bonds can rightfully feel a sense of panic in volatile markets, but investors working in tandem with an experienced money manager should be less vulnerable when the market goes into a free-fall.
An experienced manager will have “packed his parachute” by owning companies picked to weather down drafts, and will use the down market as an opportunity, buying companies “on sale” when others are panicking.
This is not to say that well managed money doesn’t go down, but the goal is to go down slower, with a good enough experience that you don’t mind getting back on the plane for another ride.