09/06: Tortoise and the Hare
Perhaps you remember the famous race between the turtle and the rabbit? I am sure you do.
Benchmark has been advocating that most clients adopt the "slow and steady" approach to asset allocation and portfolio construction. If you have read our earlier posts you can see that we are very concerned about risk and have been for two years or longer.
Our suggestions have paid off for the patient investor. Last year our diversified portfolios did better than US stocks alone with something like one-third of the risk.
The early part of 2006 has been trying as the rabbit (risk taker) has been rewarded. Until May that is. The rabbit got spanked (many agressive portfolios fell 8% or more )in May and early June while our conservatively structured lists gave up about 1%. Benchmark's portfolios have come even with the aggressive portfolios for the year-to-date. The rabbit has come back to us.
What's next?
We do not know.
We do believe that maintaining a "tortoise-like" posture will pay off handsomely in the coming months. Slow and steady wins the race. The rabbit may experience a different outcome.
OSF
June 9, 2006
Benchmark has been advocating that most clients adopt the "slow and steady" approach to asset allocation and portfolio construction. If you have read our earlier posts you can see that we are very concerned about risk and have been for two years or longer.
Our suggestions have paid off for the patient investor. Last year our diversified portfolios did better than US stocks alone with something like one-third of the risk.
The early part of 2006 has been trying as the rabbit (risk taker) has been rewarded. Until May that is. The rabbit got spanked (many agressive portfolios fell 8% or more )in May and early June while our conservatively structured lists gave up about 1%. Benchmark's portfolios have come even with the aggressive portfolios for the year-to-date. The rabbit has come back to us.
What's next?
We do not know.
We do believe that maintaining a "tortoise-like" posture will pay off handsomely in the coming months. Slow and steady wins the race. The rabbit may experience a different outcome.
OSF
June 9, 2006
