Paul's blog

"I just want to make it through the territory,” a FIM Group client told me back in March 2009. “It’s that simple.” The client had been with us for over 12 years, having hired us while he was still employed, and he is now several years into his retirement. The “territory” he referred to is the next 20 to 30 years of his life funded by returns from his investment portfolio.

After this last year’s dismal returns on nearly all asset classes, jobs lost and business failures, going forward the investing world will be affected. Every investor needs to realize some basics. First, life goes on. Economic activity is always happening.

Is investing in Gold the answer?

The superior performance of proven private investors like Buffett and Templeton – and economic scholars like Benjamin Graham and Larry Ellison– can be distilled into a single, disciplined approach that captures the essence of their investment strategies. This approach is fortified by best practices that attempt to sustainably do one thing – maximize benefits by using the following investment tools:

Diversification and concentration

Conscientious security analysis

A “price matters” orientation to capture excess returns

Money doesn’t manage itself. Asset allocation, diversification, security analysis and capturing excess returns don’t just happen. These tools require the “hands-on” management of a skilled, talented manager who can implement them with consistency and discipline, unencumbered by the four psychological poisons that can reduce investors’ returns.

Four Poisons

Recency effect

Endowment behavior

Fear and inertia

I think it is quite possible that our unemployment rate could rise to 15% and our economy could be stagnant, with little growth for quite some time. The global economy will also be slow as it attempts to recover from the excesses of the past. Industries, countries, institutions and consumers went wild during the past 10 years, borrowing to finance everything from TVs to wars. The world was looking for immediate gratification. Respect for the future, rational common sense, and normal virtues of prudence and responsibility went out the window. As a result we find ourselves in a world today that seems like cause and effect, and the very institutions in which we put our faith have lost our trust.