Volatility

How does one position himself or herself so that customers are flexibly invested? The market seems to be acting much like a squirrel, moving jaggedly from tree to lawn and back. Sometimes, the squirrel runs, in a helter-skelter pattern, on to a road, taking a real chance on getting run over.

The volatility of late resembles squirrel patterns mainly because of high-frequency traders — folks who brag that being in a position for 12 seconds is a l-o-n-g time — and hedge funds. Most of the trading seems not to be done by financial planners and/or their customers. According to what I read, folks like us are mostly not in the market. Some people are getting run over.

That isn’t true for me; I have market investments, as do my customers. I confess that I farm out some assets to third-party managers whom I deem equipped to cope with: (1) volatility and (2) big downturns.

However, those third-party managers are in the market. So, I’m not sure who is out of the market, but I’ll take it on faith that many have cashed in their chips. On Marketplace Money, this week, I heard one expert suggest that regular investors should not be in the market at all, in essence saying that the investment world had proved itself to be way too risky.