Risk minimization requires the identification of what’s inside a portfolio. Risk control requires decision-making by the owner of the investment assets. Risk management requires a selection process from a universe of securities that meet a known set of qualitative standards.

Why do we jump through all of these “prevent-defense” hoops? Because we just don’t know how or have the patience to design and manage a classic, safer, plain vanilla, stocks and bonds portfolio. The market cycle is the favorite son of the investment gods. You either make it your friend or fail as an investor!

Over the past 30 years Federal Tax receipts (Corporate, Personal, Estate, Excise, Gift, Social Security, Medicare, Medicaid, et al) have averaged less than 20% of Gross Domestic Product (GDP). Read that again, and don’t think for a minute that it’s not a large number. Why isn’t that enough?

Unlike conventional mutual funds, CEFs do not issue and redeem shares directly with investors at net asset value. CEFs are listed on national securities exchanges, where shares of the Investment Company are purchased and sold in transactions with other investors, just like individual company stocks, and most often not at net asset value.

Big publishers want to sell already big names; discovering new ones is not in their wheelhouse. Are they responsible for the problems in the financial markets? Of course not, but they do have a perverse, if indirect, impact. By constantly publishing the same Wall Street friendly message, they contribute to the brainwashing.

The Stock Market is a dynamic place where investors can consistently make reasonable returns on their capital if they comply with the basic principles of the endeavor AND if they don’t measure their progress too frequently with irrelevant measuring devices

A correction is a beautiful thing, simply the flip side of a rally, big or small. Theoretically, even technically I’m told, corrections adjust equity prices to their actual value or support levels. In reality, it’s much easier than that. Here’s a list of ten things to think about doing, or to avoid doing, during corrections of any magnitude:

The key to successful Investment Management is Asset Allocation, the process of dividing the available investment dollars into two, and only two, buckets: Equity and Income Investments. All investment grade securities fit within one of these two classifications, based solely upon the primary purpose for their ownership. There are several key issues involved in successful Asset Allocation

Corrections are as much a part of the normal Market Cycle as rallies, and they can be brought about by either bad news or good news. Investors always over-analyze when prices become weak and over-indulge when prices are high, thus perpetuating the “buy high, sell low” Wall Street lunacy.

Income portfolios should have a stable market value. In thirty-five years of investment management, I’ve determined that the single biggest error investors make is their focus on the market value of income securities. Stable income yes; stable market value – not! Roughly 25% of you incorrectly put this one in the “True” column.