"Only in quiet waters things mirror themselves undistorted. Only in a quiet mind is adequate perception of the world." Hans Margolius (1902 - 1984)
The financial market "waters" are not quiet... but is your mind? Events during the past week are just the kind of distortion that has great potential to impact our "perception of the world." Let's review what happened during the week and place it into perspective for a "quiet mind:"
- The Dow has hit three major milestones in the past nine months: 12,000 last October, 13,000 in April, and 14,000 this week.
- Two Bear Stearns hedge funds are "wiped out." Is the cycle of greed near its end?
- Woes deepen for homebuilders and
- Bernanke warns on housing and energy as the economy appears to pick up steam.
- Is the al-Qaida threat greater now than before 9/11? Should it matter to financial markets?
- Are we getting closer to a 10% correction...
- Or are we about to enter into a major third leg up in this Bull market?
Perception is reality. If the financial markets "herd" perceives all is well and it bets that stock prices should accelerate, then that will be the likely outcome -- regardless of the fundamentals that may or may not be telling us otherwise. As I continuously emphasize here at TFP: The prudent investor will not attempt to "time the market" but rather seek "time in the market."
Meanwhile, to keep a "quiet mind," we must be comfortable with the world (and investment environment) around us, whether it is "quiet" or not. The consistent pursuit of wisdom and self-acquaintance will achieve that end...
TFPAuthor, Kent Thune, is the President and Owner of Atlantic Capital Investments, LLC (ACI), a 'fee-only' Registered Investment Adviser firm located in Mt. Pleasant, SC.
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