Dare To Be Different
Sir Francis Bacon (1561-1626), the father of deductive reasoning, maintained that, "If we are to achieve results never before accomplished, we must expect to employ methods never before attempted."
Those of us who counsel retirees or others with investment horizons of less than ten years hope to achieve for them stable positive returns on their invested capital. Today we accept this assignment under circumstances of extraordinarily high prices for stocks relative to any reasonable calculation of earnings and, simultaneously, nominal bond yields that are almost equally unappealing. This is a challenge not previously confronted, certainly not in the past 20 years.
Bacon's counsel suggests that investment success may require us to employ methods different from those that brought us prosperity in other circumstances. The history of our species suggests that only a minority will want to discuss change, and even fewer will be willing to embrace it. But that's what makes markets so interesting.
J. Michael Martin, JD, CFP, is president of Financial Advantage in Columbia, Md.