March 23, 2003

The Boredom of Waiting for Opportunity
by Marcel Chartier

One of the more difficult aspects of investing and implementing a financial strategy is doing nothing. Lately, I have been doing a lot of nothing. I have stopped buying individual equities simply because the level of uncertainty is such that better opportunities always seem to prevail. I have actually bought small amounts twice in the past six months thinking certain stocks have bottomed, then the market moves lower and new lows are found. So, now I am just waiting. I am continuing to dollar cost average into mutual funds as the the risk profile is better with a basket of stocks, at least for now.

I have shifted my "investment" dollars in to debt reduction, primarily as I see the economy as bottomed or bottoming, and a new rising interest rate cycle starting. The lower the debt I have, the less in potential interest payments I will make in the future and the better positioned I will be as the market rises as with less debt I will have greater cash flow. This will allow me to invest when opportunities are presented. Strategy in investing is typified by being prepared for opportunity, first by being able to notice when opportunity presents itself, then by having the means to take advantage of it when it comes.

So, here I sit, paying down debt, dollar cost averaging into mutual funds and watching markets go down, then up, then down, then down. Waiting. I see some folks are seeking refuge in some commodities, gold and oil, but based on the past, both of these commodities are virtually ignored when times return to "normal". I get better value paying down debt in the longer term, so that is where I am putting my money. I am also ignoring the tendency to put money in money market vehicles, I think by the time you can move money from those types of vehicles into good equity stocks then it is probably too late to catch the initial upward bounce.

The boredom of waiting for opportunity can be the most difficult part of an investment plan. Doing nothing is sometimes the best thing you can do, even though you may feel you should be doing something more.