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Winter Charts: A Season to Remember

Starting a new year also means setting the “investment stopwatch” back to zero.

“Winter Charts” is a series of current financial topics explained in dots, lines, and only a few words—just the right “mix” to concisely convey ideas for critical thinking about investing.


Starting a new year also means setting the “investment stopwatch” back to zero. Whereas I continue to criticize the short-term bias and focus on calendar years as opposed to preferably strategic, long-term investment outcomes, I have to recognize that there is an inherent emotional element investors apply in their assessment of risk and opportunity in markets. One of these aspects is anchored in the “seasonality” of market cycles. Think, for example, of the proverbial “year-end rally” or to “sell in May and go away;” each is often accepted as a basis for “smart” market-timing decisions.  

Only on a theoretical basis have investors been well-served to focus on select periods of the "investment calendar,” with more favorable market returns having been captured near the beginning and end of the average year. With this in mind, and given the divergence of respective calendar-year-end returns over a 30-year observed time period, making tactical allocation shifts based on expected outcomes is nothing short of a fool’s game.

We have found that clients who are actively involved in planning and stating their financial objectives, paired with a critical view, will have better investment results. In this respect, it is not so important to simply “hit a number” linked to market outcomes, but rather to be grounded in realistic return expectations based on associated risks and impact on one's long-term financial goals. Stay with this focus in 2016.


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Matthias Paul Kuhlmey is a Partner and Head of Global Investment Solutions (GIS) at HighTower Advisors. He serves as wealth manager to High Net Worth and Ultra-High Net Worth Individuals, Family Offices, and Institutions.

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