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By Tony Wanless
Market Behaviour
Excerpt from National Post Online
Saturday, March 24, 2001
VANCOUVER - Investor
Alan Dickson lost more than 50% of his portfolio
in the recent plunge but he isn't crying in his
beer.
"I didn't lose sleep over it," drawls Mr. Dickson,
49, who used to be in the mutual fund and insurance
business and has "semi-retired" to Vancouver Island.
"It was my play money. But, if it was my life
savings and I was five years away from retirement,
I'd be panicking. And if I was still selling funds,
I would be very upset because many of my clients
would be hurt."
Mr. Dickson, who's putting together a book, Free
Parking: A Second Look At Financial Planning,
about the mutual fund industry, has been an active
investor for some time, even changing his Internet
password to "short" a year ago. So he's not surprised
by the big correction that has gripped the market.
"I pulled out some and still have some there
but it's undervalued, so I'll just leave it,"
he says. "This is quite a drop, but it's not as
gut-wrenching as what happened in 1987. Then there
was wholesale panic."
Also, Mr. Dickson is a simplicity advocate and
believes in living on less. So whatever he has
in the market is there as much for entertainment
as to generate returns.
"People's assumptions that they can't be happy
without money are wrong," he explains. "You can."
Still Mr. Dickson doesn't dismiss the market
volatility. He feels it's not over yet.
"It bothered me that I wasn't smart enough to
do a few things but, generally, I'm not too worried,"
he says.
"I check what I have every day, but my retirement
isn't based on it and the pendulum always moves
back. You always have to ask yourself, when looking
at a stock under these conditions, 'If I had money,
would I buy this stock at this price?' If you
can't say yes, maybe you should sell it."
Pointing out that this is just another bear market,
one of 10 since the Second World War, Adrian
Mastracci, a Vancouver investment counsellor
with KCM Wealth Management, suggests the
people who worry the most are suffering from information
overload. "People are coming to me and they're
totally confused.
"We have lost the long-term perspective. People
want instant results. But, if you can't see at
least five years out, you shouldn't be in the
markets.
"People spend far too much time on the selection
process and not enough on the long-term asset
allocation process," Mr. Mastracci adds. "They've
become very transaction-oriented and often don't
know why they're doing what they do."
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