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“BUY LOW…SELL HIGH” – LOOK FAMILIAR?

“Buy low…Sell High”  Sound familiar?  Good Morning Everyone!  It’s been a few months since our last post.  After spending several years analyzing dozens and dozens of investment charts and graphs as a stockbroker/financial consultant/and a middle-market institutional broker at two international investment firms, I saw the above graph and article this morning on Bloomberg.  I couldn’t resist…I have to share my views and make a few comments…

As the saying goes, “a picture is worth a thousand words.”  And this picture on the surface tells a lot.  Based on my years of experience advising and consulting the general public, (both inexperienced as well as very experienced investors) on prudent investment management, I know most everyday investors and self-proclaimed savvy or experienced investors simply don’t understand the foundational principles of investing.  The general principle is to buy low and sell high.  In most cases, the general public invests in a manner that is the exact opposite…they tend to emotionally buy high, and in a panic… sell low.  The savvy/experienced investors on the other hand do exactly what they should do…they unemotionally buy low and unemotionally sell high!  How do they do this?  The answer in general terms is simple, but it’s not easy.  They do the following, but methodically:

  1. They don’t invest with emotion, they invest with discipline using financials/trading models etc. (which are all available to the public through their investment firms and online sources)
  2. They do their own homework first, by relying on their own research, good advisors (if they need one), and their own business sense.
  3. They don’t follow the crowd…they do quite the opposite.  They buy when the public is emotionally selling or panicked, and sell when the public is emotionally optimistic and running up the markets.

The point is, if you want to buy low and sell high, you have to get into the mindset of the savvy experienced investors.  Beginning with understanding where the markets are in the midst of the investment cycle…are they over-valued or under-valued?  Are they at high or low valuations.  And secondly, begin asking yourself (or your advisors) strategic questions.  As you can see in the above chart, all three markets are at or near their all-time highs.  Then depending on whether you are an existing owner or considering to be an/investor/or speculator, ask yourself the following questions:

  • Are the markets (stock/bond/real estate) under-valued or over-valued?
    • Based on what information and valuation data?
    • What are your investment goals & objectives?
    • What’s your time horizon?
    • What’s your expected R.O.I.?
  • Is it a good time to be either a buyer or a seller in any these markets right now?
    • It depends…What’s your motivation?
    • Are you an existing holder considering to sell…or an investor considering to buy…or simply a speculator looking for a short-term profit?
  • Why do you want to buy/sell/ or hold in these markets now…is it due to need/long-term investment/speculation?
    • Again…What’s your motivation?
  • What’s your buy/sell discipline…your entry/exit points?
    • How did you arrive at those entry/exit points…through emotion or through a careful analysis of financial data and momentum oscillator data?
    • Again…What’s your time horizon?
    • Again…What’s your projected R.O.I. given your time horizon?

In general…not always…when the general public’s interest goes one way (in terms of investing), you may want to consider doing the opposite (however do your own due diligence and research first, and don’t rely on others!).  Generally, when it comes to “investment timing”, people tend to buy their investment assets at inappropriate times because they feel good or positive about the economy/the markets/or a particular company is popular or they’re afraid they’re missing out.  When it comes to inappropriate investment timing on selling, it’s usually because the markets are diving and they simply panic.  In either case the timing is off due to emotional investing and not methodical investing.  That’s understandable…we’re human!  That said, most experienced investors understand this costly emotional roller coaster and tend to avoid that ride by doing the fore-mentioned above.  When markets have fallen and asset valuations are near their lowest price points in their market cycle, this often times presents an optimal time to begin acquire such assets.  Likewise, when the markets are reaching new highs and the general public has taken an emotional buying position, this may be an opportune time to begin  taking some profits off the table, and setting the cash aside to invest when prices soften once again.

Is this a simple concept…yes.  Is it easy to implement…no.  When it comes to investing, most people tend to take action based on their emotional instincts…which are usually wrong.  Interestingly, the Bible also cautions us to not be ruled by emotions as ““The heart is deceitful above all things, and desperately wicked; Who can know it?” (Jeremiah 17:9…please understand this text in its context).  So given the state of these markets, use your common sense…your business sense…do your own research…ask strategic questions, and make your investment decisions based on research and not emotion.  This will get you closer to becoming a savvy, experienced investor with the mind-set and practice of buying low and selling high.  We hope you found our perspectives and opinions to be insightful and helpful.

GMS BUSINESS CONSULTING provides lawyers and business professionals with Accounting Services, Business Development Services, Business Optimization Services and Digital Marketing Services to help business professionals successfully organize, grow and operate their businesses more effectively and efficiently.  We do NOT provide investment advice.  Contact Us  if you are interested in learning more about our services, and in particular about M.A.P. (our 3-phase business development solution), designed to help you strategically focus and tactically grow your business.  We would welcome the opportunity to speak with you.

info@gmsbusinessconsulting.com

707-218-3135

John 14:15

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Planning Ahead For 2017 – Best Practices

Strategically PlanBest PracticesMeasuring Results

Hello Everyone!  It’s been a few months since our last post.  We’ve been busy with new business opportunities in new markets that have taken much time from our posting.  We wanted to touch base with our readers on a topic that comes up regularly.  It has to do with something very basic, is relatable by most of us, and is very common among most business professionals we meet; regardless of geographic location or level of experience within their firm or business.  That topic is effective, strategic business planning.  So we want to share with you our views on how to do effective Business Planning For 2017 – by applying some basic “Best Practices”.

While we recommend our existing clients to begin their planning for the next year well in advance, beginning in August – September (to allow enough time to plan, design and implement various campaigns come the beginning of the year).  That said… DON’T WAIT until August to begin your initial planning!  If you’re not a client of ours yet, the best time to begin planning is NOW.  Whatever day you come to the realization that you need to plan more strategically and effectively, begin the process.  You’ll NEVER make-up for lost time.  Listed below are a few best practices related to strategic and effective planning:

  • BREAK THE BONDAGE OF PROCRASTINATION – This is the most critical initial step to strategic business planning.  Putting this off for another day only negatively affects you, your progress and results.  Set a date, calendar it, and do it.  Sounds simple, and it is, however it’s not always easy to do for a variety of reasons.  The bottom-line, is the further you put this off, the greater the negative impact.  The sooner you break the bondage of procrastination, the sooner you begin the path to accomplishing your business goals and reaping the success and results.
  • CONSULT WITH AN ADVISOR – I know this may sound self-serving, but it isn’t.  While we do this for a living (helping clients to strategically focus and tactically grow their practices and businesses), the point is, whether you consult with us or any other organization, don’t go it alone…work with an independent advisor.  Seek someone with relevant experience and expertise in your industry, YET has the ability to critically and constructively guide you away from current ineffective practices, and guide you to more effective and practical practices.  This consultant/advisor should help you strategically align your personal and business goals and objectives with a tactical plan of action, and help you to effectively implement new practices and procedures that will enable you to successfully reach your business goals.
  • EXECUTE YOUR PLAN –  The most strategic plan, the best plan ever designed is utterly useless if the plan is not well executed.  This takes a little time, planning, implementation and patience.  One of the keys to effectively implementing your business and action plan is setting clear and tactical action steps.  Once these action steps are established, they must be embedded into your daily/ weekly/ monthly calendar or CRM solution and put into action.  Without the above stated steps, the execution of your plan is meaningless, and will most likely result in missed goals and opportunities, frustration and perhaps failure.  However, by implementing the fore-mentioned steps, the process will become purposeful, measurable, gratifying and successful.
  • MONITOR & MEASURE YOUR PLAN – Lastly, make sure to evaluate and measure your progress.  Many business professionals begin with a fast start…keeping track of their progress, then begin to slack on documenting their progress, then eventually slack on measuring their progress on a weekly and monthly basis.  This may result in prolonging what could be a simple fix or adjustment to the plan, and may result in wasted time, money, efforts and disappointment.  However, disciplined and systematic monitoring and measuring your progress will enable you to be informed on a timely basis, allowing you to make adjustments when/if needed, and will give you assurance that you’re on the right path to meet your goals and objectives.

We hope this gives you some food for thought on effective business planning for 2017.  These are simple guides and best practices that can dramatically impact the effectiveness of your strategic planning for this next year.  Keep in mind, it doesn’t matter when you begin your planning, just as long as you begin planning and don’t procrastinate.  Have a good 4th quarter of this year, and do yourself a favor and begin strategically and effectively planning for a strong 2017.

 

GMS BUSINESS CONSULTING provides lawyers and business professionals with Accounting Services, Business Development Services, Business Optimization Services and Digital Marketing Services to help business professionals successfully organize, grow and operate their businesses more effectively and efficiently.  We do NOT provide investment advice.  Contact us if you are interested in learning more about our services, and in particular, about our M.A.P. (our 3-phase business development solution) to help you strategically focus and tactically grow your business.  We would welcome the opportunity to speak with you.

info@gmsbusinessconsulting.com

707-218-3135

John 14:15

GMS Business Consulting 377 Comments

Former Fed Regulator Appologizes For Quantitative Easing (QE)

Federal-Reserve-Building-Washington-D_C  JP Morgan Chase

Hello Everyone!  Anyone having a keen sense of the obvious would agree that too much power in the hands of too few is a recipe for disaster.  That is the current state of our banking/financial system, and more specifically, talking about the “Too big To Fail Banks” (which is counter to capitalism isn’t it?).  Listen to this interview on Bloomberg with former Fed regulator Andrew Huszar, who candidly yet diplomatically describes the foundational problems of the Fed, QE, and our current banking structure. Read more