2016_06_29 — “Why Investing Feels Awkward, and What To Do About It” — White Paper

Credit: “Citrus on a Shelf,” painting and photo by Michael Ashley

Why Investing Feels Awkward, and What To Do About It” — White Paper

By Michael Ashley Schulman, CFA

Markets perform better when things go from terrible to bad than from good to great: This is one of the hardest parts about investing. It rarely feels right to invest or rebalance into a cheaper investment class because usually things are cheap for a reason. You’ll never find a market on sale because things are great. [1]

The elements that create success for a focused and ambitious person in business or personal pursuits do not naturally translate to most professionally managed investment portfolios. People tend to focus themselves and their businesses on what proves to be successful and either fix or nix what doesn’t work. On the other hand, a balanced investment portfolio will often sell winners and reallocate to laggards. Therefore, proper professional investment portfolios may feel unnatural because they often don’t focus on or double up on the winners. Over time, the uncomfortable diversification strategy tends to be the true winner, allowing one to apply themselves to their passions and legacy knowing they also succeeded in other aspects of life.

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Michael Ashley Schulman

Michael Ashley Schulman

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Avid traveler and art fan, also Partner & Chief Investment Officer @Running Point Capital, a multifamily office and ultra high-net-worth money-management firm