Recently someone who I have known awhile sent me an email and asked me how it is that I am skilled enough to maintain both Income and Growth portfolios This person asked me, honestly, transparently and quite straight forward which set of results from the Income and the Growth portfolios, respectively and comparatively…were the superior of the two. Further - this investor asked in a joking manner if there was some sort of test to determine if one would be better served as an Income investor or better as Growth investor. In short - which type of investor are they best suited for and would - obtain - via natural skills - the best results. The answers to both these questions, to say the least, are complicated:
So…lets start with the first one first:
My results have been better in the Growth port - but that doesn’t really get to the heart of the matter. Because - the Income port has done well in that it covers, and produces what it was designed for. To that end - I can do both styles of investing not because of skill or talent; but rather, largely due to finding the right trail guides for both. So in the end - it’s only that I decided that both types of investing ports were needed within the context of the family wealth plan.
To answer the second question I’ll let you decide for yourself. For example, by answering a simple question I can pretty much determine which type of investing would suit you best and which one might make you happier. Skeptical? Ok lets try it:
But first, let me give you an example of how I can go into practically any political district and determine who will win the key races in that district by simply asking a crowd of people or more this difficult question:
On an individual basis do you prefer Vanilla Ice cream or do you prefer Chocolate Ice Cream? I have done this many times while giving presentations: Who knew ice cream choices could determine political outcomes: Go figure? So what about determining whether any particular investor would be better skilled, or suited for Income investing; or alternatively, Growth Investing? Well…it’s pretty simple actually.
Over the course of my life I have determined that there are distinct groups of folks that fall on either side of this question:
Do you prefer the Do Was Diddy in this song:
Or the: Ee-e-e-um-um-a-weh Wemoweh, Wemoweh.
In this song:
Now…I fully realize that some of you will be skeptical…I understand. But - unless you figure this question out you may never know what the true path was/is…which fork in the road to take as such - along the investing path.
All the Best.
BDH Investing