A. Michael Lipper, CFA, is president of Lipper Advisory Services, Inc., a firm providing money management services for wealthy families, retirement plans and charitable organizations. A former president of the New York Society of Security Analysts, he created the Lipper Growth Fund Index, the first of today’s global array of Lipper Indexes, averages and performance analyses for mutual funds. After selling his company to Reuters in 1998, Lipper has focused his energy on managing the investments of his clients and his family. His first book, Money Wise: How to Create, Grow and Preserve Your Wealth, was published by St. Martin's Press. Lipper’s unique perspectives on world markets and their implications have been posted weekly on his blog since August, 2008.
Most professional investors pride themselves on their timing of purchases and thus focus on current condition. But, because buying correctly is much easier than selling (though nothing in the art form of investing is easy), investment professionals should feel responsible for doing the difficult task to earn premium pay over the mechanics, extrapolators, and closet indexers.
We may believe that inflation is a relatively new phenomenon, one from the time of the birth of coins and currencies, but for those of us that live in the world of numbers and taxes, the key to the discovery was the term used for the exponential growth of particles that became planets and other objects. That term was "inflation." Thus, the term from the physical world describes a power that keeps growing.
Investing is both an art form and a competitive sport. The art form attempts to use, within constraints, creativity to produce periodic investment results. The competitive sport comes in when you start to compare how well a fund does versus others that are operating under the same or similar constraints.
Peaks are based on the belief that great wealth will be bestowed on the investors who believe in the presumed future, but watch out when brokers start pushing growth and then watch for changes in the market structure.
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