UPS Requires Photo IDs for Shipping

In the wake of the latest terrorist schemes to mail order a bomb, UPS is now requiring photo identification from customers shipping packages at retail locations around the world, a month after explosives made its way on to one of the company's planes.

UPS said Tuesday the move is part of an ongoing review to enhance security. The directive will apply at The UPS Store, Mail Boxes Etc. locations and other authorized shipping outlets. UPS customer centers have required government-issued photo identification since 2005.

In late October, a printer cartridge on a UPS cargo plane bound for Chicago was stopped in London after explosives were discovered. The package was later traced to a retail location in Yemen.

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This is modified news article found at: Finance.yahoo.com

Hard Work is Here Again!

The free ride in the market is over – for those  investors relying on the sage advice of buy-and-hold.  Don’t expect to make money in the future buying just about anything.  What happened two years ago when stock prices fell through the floor was extremely atypical for stocks.  The market will likely be much more discriminating in determining whom it allows to be a “genius.”

Investors will have to know what they’re buying.  They’ll have to know why they’re buying it and best of all, they’ll have to know when to sell it.  They’ll have to make these tough decisions when the free ride comes to an end, as with what we’re seeing now.

Choppy, manipulated markets put a premium on knowledge and information.  And that means reevaluating what you own, upgrading your portfolio if need be, rebalancing to control risk, and restructuring your portfolio to reduce volatility.

An Investor’s View of Risk

In the real world, investors define risk in a variety of ways.  Mention risk, and many will begin to imagine total, irrevocable, gone-forever loss of their principal.  Fluctuation is not loss of principal.  It is just fluctuation.  Here’s an example that should make the difference clear.  Let’s say you decided that your backyard contains oil. After a million dollars spent drilling, it turns out that there is no oil.  No matter what you do, no matter how long you look at the well, no matter what happens to the price of oil, your money is gone. You have had an irrevocable loss of capital.

Let’s say that you took the same million dollars and bought a diversified investment portfolio (stocks, bonds, hedge funds, proactive asset management).  You then have an unusually bad result the first year, and lose 20 percent of your investment.  Well, you have had an interesting fluctuation, but have not had a capital loss if you can refrain from doing the very worst possible thing and pulling your money out of those investments while the values are down. 

Markets have always recovered in the past. Some took longer than originally anticipated, others faster than anyone can expect.  History indicates that all you must do to recover and go on to acceptable profits is to hang tight.  While an individual stock can go certainly to zero (think Enron, Lehman, and countless others), entire markets don’t.  Except for war or revolution, I am unaware of any market that has gone down without recovering.  As long as we expect the world’s economy to continue to move, the value of the securities markets will reflect that movement. 

Less Is More

Good asset management practices are strategic and evolutionary, not stagnant.  You must keep your long-term goals and objectives firmly in mind while allowing yourself the flexibility to evolve as new research provides better solutions to the risk management problem, or as new market opportunities present themselves.  Discipline is the key to success for the long-term investor.  He or she must not fall into the trap of managing holdings by newspaper headline, sound bites, mindless prediction, gut feelings, or last year’s results.

Developing a successful, modern investment strategy is a lot like gardening.  Both activities require patience, discipline, and faith.  Periodic reviews should be viewed as an opportunity for fine-tuning and corrections, not radical revisions and second-guessing.