Sometimes the best thing to do is nothing |
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Bill said, “The hardest part of my job is that I am forced to make trades even when I know the best thing for the client is to do nothing.” What Bill is identifying is the frustration he experiences when he is forced to buy stock for his clients, but doesn’t see anything in the market worthy of purchasing. This may be due to the fact that there isn’t any desirable stocks that meet his client’s risk and interest perspectives, or that there are great companies available but they are overpriced. Bill’s comments gave me pause. I personally haven’t cut a trade in over a month- there are great companies out there, just nothing that I am really interested in. So for me sitting in cash at the current point is far better than introducing risk by paying for a bad company, or paying too much for a good company.
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4 responses to “Sometimes the best thing to do is nothing”
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Chris October 1st, 2009 at 03:41 I have been battling this same problem. I told myself I would buy 1 stock a month, but here it is the end of the month and there is nothing I want to buy. |
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value investor October 3rd, 2009 at 21:43 Glad to hear there are some like minded people out there Chris! |
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Dividend Tree Potpourri – October 3, 2009 | Dividend Tree October 5th, 2009 at 00:03 [...] Sometimes the best thing to do is nothing [...] |
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Charles November 1st, 2009 at 01:14 As a former stockbroker, I can tell you that the problem Bill described is real, and not in the best interests of the client. What’s even worse as a broker is working for a firm that is constantly pushing structured products to its customers, such as the latest “flavor of the month” in mutual funds, when you have a book of stock and option investors who have no desire to buy the firm’s high fee, low performance offerings. Most investors do not realize how much pressure is brought to bear on many stockbrokers to build a book of high-value (profitable to the firm) customers. When it comes to using a full-service broker, buyer beware. |
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