Take a pass on bandwagon investing

Monday, January 30, 2017|Investing for the Long Run|
  • Take a Pass On Bandwagon Investing

I suggest that you bypass bandwagon investing. To me, it’s a low percentage approach.

Investing in the euphoria of popular bandwagons can be very exciting. However, it is less likely to deliver.

Bandwagon investors often buy hot investments near the top. Then they miss the exits when it’s time to unload.

Everyone is searching for that magic way to invest. Don’t lose sight that consistency of return is far more beneficial than superior performance.

In my book, buying an investment is best when few people want it. Selling some of it is best when it’s on everyone’s radar.

The bandwagon approach just keeps repeating the same wrong things. Investors typically wind up with a collection of stuff that does not fit.

Just a haphazard assortment of names. The good news is that it does not have to be that way.

There is a better way to invest and manage your risks. An approach like this:

  • Buy a little when the masses sell. Stick to buying quality selections.
  • Sell a little profit when the masses buy. Also sell what does not belong in the portfolio.

No need to clear out the investment closet. No need for knee-jerk reactions or fancy steps.

Learn to take small profits when others think you’re crazy. Learn to hold your nose and step in during the rough patches.

The emphasis is on “little” moves. Simply dip your investing toes slowly over time.

You will wind up with better quality holdings and less clutter. Selling “some” higher and buying “some” lower are strategies worth pursuing.

It’s also a simple and effective way to rebalance the nest egg. Just use your asset mix for the initial target allocations.

Investing is about looking beyond what is happening today. Let’s resolve two simple things:

  • First, take a pass on bandwagon investing.
  • Second, start using my better method.

You will be glad you did.

About Adrian Mastracci, Discretionary Portfolio Manager, B.E.E., MBA  My expertise in the investment and financial advisory profession began in 1972. I graduated with the Bachelor of Electrical Engineering from General Motors Institute in 1971. I then attended the University of British Columbia, graduating with the MBA in 1972. I have attained the “Discretionary Portfolio Manager” professional designation. I am committed to offering clients the highest standard of personal service by providing prompt, courteous and professional attention. My advice is objective, unbiased and without conflicts of interest. I’m part of a team that delivers comprehensive services and best value in managing client wealth.

Leave A Comment