The Portfolio Whisperer

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As a dog owner, animal activist, and someone not so fond of the abundance of reality television (I couldn’t care less about the real housewives of here, there, or anywhere!), I find myself often watching one channel – National Geographic. A particular favorite of mine is Cesar Milan as The Dog Whisperer. Every episode is full of dog owners gone wrong and Cesar to the rescue. But, the obvious plot is actually not what interests me. If watched carefully, each episode also contains brilliant investment lessons for you and your portfolio.

Equipped with iPads and Blackberries, investors today are armed with access, information, and motivation. Everyone is an instant expert – the alpha, if you will. However, as Cesar points out, just because we are in charge doesn’t mean we are doing anything right. Most times we have good intentions. But, most times we also lack that one important ingredient that comes so innately to Cesar – calm-assertive energy. Read any of his books, watch any of his DVDs, follow his show and you will find at the heart of his teachings this one consistent, unwavering theme.

The trouble with today’s market participants is that we react. We react to what we hear, read, watch, and feel. We let our emotions drive our portfolios. We chase returns, become impatient, and are both greedy and loss averse. The moment gold or Apple (AAPL:US) hits a new high, we buy more instead of sell. The second an asset goes down or gets bad press, we abandon ship. We assume we know the answer and react accordingly. But, this back-and-forth, forcefully assuming style goes a long way in creating harm to our portfolios. We are left sitting on our couches not only wondering why the dog won’t stop barking, but why our returns are marginal at best. And, the irony – the answer to both questions is simple and the same.

We must learn from the lesson of Cesar and our canine best friends. Being emotional, overreacting, and forcing our hand will only create ill-results. But, being calm, patient, and assertive in our portfolios will enable better outcomes.

Take it from someone whose dog doesn’t bark and who makes a living being asked, “What is wrong with my portfolio?” It isn’t your dog, it’s you! And, it probably isn’t your portfolio either.

Jonathan Citrin is founder and CEO of CitrinGroup, an investment advisory firm located in Birmingham, MI. He is an adjunct professor of finance in the School of Business at Wayne State University.

Founded in 2003, CitrinGroup specializes in portfolio management and advises clients on investment and wealth planning.

Contact: 248-569-1100 or www.citringroup.com or jcitrin@citringroup.com.

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