Lighthouse is running a two-week-long series in which we share some of our principles of investment. All you need is an open mind and a few minutes each day. You can keep tabs on the action at the Principles of Investment index.
Once you know where you ‘are’, you need to look forward toward your destination. But first, you need to be aware of the coming weather conditions before you actually set sail. Does the economic and investment outlook for 2009 appear to be positive, neutral or negative?
Unlike in Part 1, this is altogether a much tougher question to answer because it requires us each to predict a future based upon limited – and often contradictory, information and data. Since no one person can have all the data about every element influencing the market-place at any given second of the day; any answer to such a question often depends on your perspective – or that of the person you choose to ask… If you ask a realtor in the US, or a car salesman in the UK, or a factory worker in Japan, you can guess their answers as being decidedly negative. However, if you change the time-frame (the perspective distance) of the question, say to 3-5 years, it would be reasonable to expect that their answers would be significantly different, and would most likely in fact be positive.
My point here is that outlook is driven always by the distance (in time) that you are looking. To see a positive perspective, you sometimes have to shift your line-of-sight to a time-line that offers greater certainty and predictability in line with your own opinions and observations. While shifting the time-line may seem rather convenient, it won’t necessarily change your destination, but it will help you better manage your personal expectations as an investor for that journey (which is critically important).
Next Monday, we’ll look at “Part 3 – How to get there… In or Out?”. If you liked this article and wish to see “How” we deliver this for our clients, do give us a buzz, we can arrange a personal introductory discussion with one of our consultant; after-all, this is the point of this blog, helping you 
