Boating, Investing, and the Federal Reserve

The old joke is that the two best days in a mans life are the day he buys a boat and the day he sells it.

It’s the end of the boating season – my first as a boat owner.  My brother, Keith, helped me get my boat out of the marina this week so it can be serviced.  After successfully getting it up on the trailer I looked down and noticed the trailer had a flat tire.  This turned a relatively simple few hours into a very long day.

Now, what do I do?  Do I focus on the frustration of the last couple of days, or do I remember the  hours of enjoyment and family bonding we had over the summer?   Do I remind myself this is why I hate possessions, or do I think of the Willes family mantra, “you can’t put a price on memories!”

While I’m tempted to be frustrated, I know I’ll be ready to boat again once the spring comes around.  The weather is going to turn cold in a couple of months, and I’ll start looking forward to lounging in the sun and driving my kids while they surf.  Things happen.  Remember the long game.

Today, the Federal Reserve bank decided not to change short-term interest rates.  For too many years, investors have treated the Fed like they would a boat – the best day is when they cut interest rates or provide other accommodation.   The worst is the day they increase rates or take the punch bowl away.  For now, the Fed is standing pat, disaster has been averted, and stocks are rallying.

If you were waiting for the Fed’s decision today to make an investment decision you have it exactly wrong.  Now, the media will shift its attention to earnings season in a couple of weeks, the election, and then the December Fed decision talk will begin.  It will be a replay of the last month with speeches,  speculation, and differences of opinion.  I have no idea what the Fed will do in December.   Trying to predict these moves is a poor way to invest.

The real boating memories are created on the water.  Part of the cost associated with boating are days like I had taking my boat out of the water.  The real money from investing is made owning good assets over time.  Part of the cost associated with investing is learning to ignore days like today. 

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