Current market environment performance of dynamic, risk-managed investment solutions.
By Jerry Wagner
A familiar song got me thinking about the many “buy and hope” investors who take a passive approach to investing—and how risky it can be.
The song was “Que Sera, Sera,” recorded by Doris Day, one of my favorite entertainers and a top box-office draw of the 1950s and early 1960s. Some may not recall that, in addition to her movie career, Doris Day was also a pop recording artist. She got her start during the big-band era and went on to have numerous hit records during a singing career that spanned decades.
The song most associated with her is probably “Que Será, Será.” Although the song reached No. 2 on the hit parade and became the theme for the five-season run of her TV show, Day was not a fan. “I just, I didn’t think it was a good song,” she once said.
I have to say I agree with her. While I like the tune, the lyrics turn me off. “Que Será, Será” translates to “Whatever will be, will be.” I could never approach life that way. I have always been more hands-on and determined to shape my own future.
I guess it’s not surprising that I take a similar approach to investing. Too often, I’ve seen investors who adopt a “whatever will be, will be” attitude suffer when bull markets crash abruptly.
Investing for “whatever will be”
A bull market can feel like living in the 1950s—a time often remembered as easygoing and prosperous. The economy was roaring, and the stock market was soaring. It seemed like the good times would never end.
I know that’s how I felt during my first 10 years of life. Then a recession hit, and I noticed the increasing concern on my father’s face. He started his own business in 1954, and it had done well. Three years in, he purchased a lot for a new home. He was in the middle of building it when the recession hit, and money got tight. It was touch and go for a while. But he worked harder, recovered, and saw even greater success in the 1960s.
Investors can be lulled into a false sense of security during good times, often taking on more risk than they realize. Unfortunately, as Dad found out, a recession or unforeseen event can change circumstances quickly.
One way investors can prepare for such uncertainty is to invest as if such an event is always possible. More than 50 years of actively managing my investment portfolio have taught me this.
The 1950s were also when “buy and hope” investing came of age. Believe me, no one would have told an investor to just “buy and hope” in the 1930s or 1940s. Instead of sitting and taking it, the dynamic, risk-managed approach that I believe should guide investing activity seeks out opportunities for both profits and risk avoidance in all market environments.
“Que Será, Será” may be a pleasant tune to whistle during the good times, but it can sound decidedly out of tune when bad times hit. During a nasty economic environment, you don’t want your investment plan to amount to “whatever will be, will be.”