You may have the right idea, but you may still lose.
It always fascinates me how certain well understood and economically justifiable anomalies tend to correct themselves in very sudden and unexplainable manners. It’s the kind of stuff that mesmerises analysts and makes the fortunes of ‘star investors’ who were simply in the right place at the right time (more succinctly, plain lucky).
Taxes are important but should not be the main concern.
Confusion seems to persist for many investors as to what comes first – investment or fiscal strategy? There is a fact that needs to be kept in mind when approaching this confusion: the investment strategy, together with the time horizon, determines the size of the pie the investor is likely to get; the fiscal strategy the investor pursues determines the proportion of that pie the investor gets to keep (for immediate consumption or reinvestment). Often we tend to focus much more on the latter than the former. We let the tail wag the dog.
Recently, a newsletter on ETFs began one of its daily pieces with this sentence:
What does it say about the global economy and geopolitical unrest when financial advisors are hunkering down with increasing allocations to gold in client portfolios?
Humans excel at procrastinating. When solutions to important matters require actions which are identifiable and, with organization, executable in time we stand still and let inertia take over. Three instances come to mind.
I have decided to separate the English and the Italian versions of my periodic notes into two separate posts. If you are receiving the wrong version, please let me know and I will correct the language assignment (including receiving both versions). Or, if you prefer, go to orthos.ch/blog where you can find all posts under the language of your choice.
Speaking with a client I came across, not for the first time, a question that remains absolutely essential to those seeking solutions in managing their finances: who do you ask for help? My client’s perplexities arise from both the imprecise definition of some terms and the opacity with which they are freely used by investment management and banking groups.
Nebulous thoughts, I know; but I have to get them off my chest.
There are two things I cannot reconcile in the context of today’s benign and relaxed markets: their singularly focussed obsession with the imminent direction of monetary policies around the globe, and their lack of concern for important changes in the world’s order and functioning.
Our memories are tricky, we know that; they change and evolve with time, emotions and moods, getting progressively more distant form the actual events.
Within the span of six short months, in America we have come full circle: at the end of last year we were expecting between 4-6 interest rates cuts in 2024, now we are at only 1-2 cuts, with 20% of the market expecting an interest rate rise.