Market insights and analysis

By Jerry Wagner

The other day, I was thinking about the many “buy and hope” investors out there who take a passive approach to investing—and how risky it can be.

I was listening to a song on the radio by Doris Day, one of my favorite entertainers and a top box-office draw of the 1950s and early 1960s. Some may not recall that in addition to her movie career, Doris Day was also a pop recording artist. She got her start in the big-band era but had a singing career that spanned two decades. Along the way, she had many No. 1 records and appeared often on the Billboard charts.

The song most associated with her is probably “Que Será, Será.” Although the song reached No. 2 on the hit parade and was the theme for the five-year run of her TV show, Day was not a fan. “I just, I didn’t think it was a good song,” she once said.

I have to say I agree with her. While I like the tune, the lyrics turn me off. “Que Será, Será” translates to “Whatever will be, will be.” I could never approach life that way. I have always been more hands-on and full of self-determination.

I guess it’s not surprising that when it comes to investing, I take a similar approach. Too often, I’ve seen investors who adopt a “whatever will be, will be” attitude suffer when bull markets crash abruptly.

Investing for “whatever will be”

A bull market can feel like living in the 1950s—a time when life seemed easygoing. The economy was roaring, and the stock market was soaring. It seemed like the good times would never end.

I know that’s how I felt during my first 10 years of life. Then a recession hit, and I noticed the increasing looks of concern on my father’s face. He started his own business in 1954, and it had done well. Three years in, he purchased a lot for a new home. He was in the middle of building it when the recession hit and money got tight. It was touch and go for a while. But he worked harder and recovered, seeing even greater success in the 1960s.

Investors can be lulled into a false sense of security during good times, often taking on more risk than they should. Unfortunately, as Dad found out, a recession or unforeseen event is always looming.

One of the best ways to avoid the heartache and losses that such an unpredictable event can cause is to invest as if such an event is always possible. More than 50 years of actively managing my investment portfolio have taught me this.

The 1950s was also when “buy and hope” investing came of age. Believe me, no one would have told an investor to just “buy and hope” in the 1930s or 1940s. Instead of sitting and taking it, the dynamic, risk-managed approach that I believe should guide investing activity seeks out opportunities for both profits and risk avoidance in all market environments.

“Que Será, Será” may be a pleasant tune to whistle during the good times, but it sounds “out of tune” when bad times hit. During a nasty economic environment, you don’t want to be reminded that “whatever will be, will be.”