Last Saturday, May 18, 2013, U.S. Federal Reserve Chairman Ben Bernanke gave a commencement speech to this year’s graduates of Bard Collage at Simon’s Rock in Barrington, Massachusetts.
As part of my regular Saturday morning reading, I happened to come across the online text of Mr. Bernanke’s speech.
The speech included all of the optimism and uplifting language that is required at a college graduation. There was one particular set of comments that Mr. Bernanke made to the college graduates that caught my attention.
I know that I can apply Mr. Bernanke’s comments in how I help individual investors better manage their investments.
“During your working lives, you will have to reinvent yourselves many times. Success and satisfaction will not come from mastering a fixed body of knowledge but from constant adaptation and creativity in a rapidly changing world. Engaging with and applying new technologies will be a crucial part of that adaptation.”
I graduated from college over 30 years ago, but today I can appreciate the timeliness of those comments and they apply to my job today.
Frequently I meet with individual investors who are trying to manage their investments using rules and guidelines that they learned about many years ago. These individuals still cling to a fixed investment management strategy that they learned from a book or article that they read years and years ago.
Think about how many technological advances of the last few years that have changed our everyday lives. There has been the same level of technology advances in the investment management business over the last few years.
Successful investment management in today’s world requires adaptation and adjustment to the ever changing U.S. economy and financial markets. Today, you can make the case that the economies and financial markets around the world all connected; making adaptation and change even more critical.
Mr. Bernanke’s comment got me thinking about how I need to constantly remind my investment management clients about how important it is to change their investment management strategy as the world economies and stock markets change.
With the still fragile state of the U.S. economy, whoever thought that the U.S. stock markets would continually trade at all-time highs over the last few weeks? Not even the financial experts saw this recent stock market advance coming.
The next surprise will be how individual investors make the necessary investment management adjustments to a declining stock market environment.
History tells us that another great stock market decline will come eventually. Adaptation and applying new investment management technology will be the only way that individual investors will protect their recent stock market profits.
Ric Lager
Lager & Company, Inc.
