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Years ago, during the latter stages of my field management work, I reported to a regional officer named Bob. He loved to travel and said, often, “All motion is progress.” I’m not sure he was right. Sometimes not moving is a good idea. One could have moved his or her customers away from Ivy Asset Strategy across the board when it had a terrible 2011, or, on the other hand, simply stuck with the fund, run by two pretty damn smart hombres named Mike Avery and Ryan Caldwell. 

Last week’s blog was devoted to tacticality; however Messrs. Avery and Caldwell are masters of strategy. Whereas I used to strategically place customers in a blend of funds and stocks, now I combine strategic players with tactical managers. The result is hopefully beautiful music, hopefully a symphony with much lower downside risk.   

John Bogle, the founder of Vanguard, has always been right about index funds outperforming most all managed funds. That is to say, he was always right, until the last 12 years happened. Given the motion of high frequency trading and crazy volatility, management — both tactical and strategic — has come into its own. Index funds may be fine for part of a portfolio, but these days it seems to be the combination of intelligent strategies that works.   

Have a good week, and keep moving, but don’t move the wrong things or even move the right things at the wrong time.

 

For more from Richard Hoe, see:

Speed Dating for Financial Planning?

Why Honesty’s the Best Policy

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