“We got a pretty good team, good boys, strong boys; District champs the last three years.”
—from “No. 29,” as performed by Steve Earle
Two years ago on an autumn Saturday I lowered my home decorating magazine and said across the room, "What's a first down?" My husband stared in wonder and surprise. In 37 years, it was the first football-related question I had ever initiated.
We talked about basic strategies and rules. Things evolved from there, and last year we purchased tickets and attended my first major college game in decades. I actually loved it.
The finer points and nuances of the game itself are still beyond me, though I cheer for our team. The winning and losing isn't nearly as important to me as the quality of the evening. A spectacle under the lights on a college campus feels like autumn should. Maybe it reminds me of my own collegiate years. Regardless, it's an exhilarating and powerful experience: the sounds of pre-game and halftime band performances; the passion of the students and fans; the color and pageantry of the scene. It’s all captivating. And football means fall is around the corner.
It is typical of my timing that just when college football attendance is experiencing its first serious decline in decades I have jumped on the bandwagon. Perhaps my long association with investing has created a contrarian's approach to fandom. Investing is an activity that, by definition, rewards those who avoid following the crowd. If you buy a security when everyone else is doing the same, frequently it has been bid up and it's likely that you're paying too high a price for it. This is not always the case; sometimes large numbers of investors purchase a security and it continues to increase in value. But, as the late financial journalist Louis Rukeyser once said, “Trees don’t grow to the sky.”
The trick is to locate a good company, and then buy it during a downturn, or when other investors are selling it. In this sense, a good investor must understand the value of a company, and then trust that a decline in share price is temporary.
Market dynamics are changing, but many basic investing principles still apply. Simply stated, buy a good company, one which you’ll be glad to own three to five years from now as well as today. And buy it at a fair or advantageous price. To do so, you often must have the confidence to go against the grain and buy when others are selling. Then, during the next downturn, you must have the tenacity to hold when others are bailing.
Margaret R. McDowell, ChFC®, AIF®, author of the syndicated economic column “Arbor Outlook,” is the founder of Arbor Wealth Management, LLC, (850.608.6121 – www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin.