I Don’t Know
Investment decisions are largely based on expectations. Estimating future value is very difficult and inherently uncertain, which no amount of education and experience can fully overcome. Future values are sometimes based on anticipated innovations, historical performance, broader industry trends and many other factors. Even with careful analysis, not all investment opportunities lend themselves to high confidence projections. When confronted with an investment idea that is too difficult to assess, “I don’t know” can be the best response.
Unfortunately, sometimes an “I don’t know” is seen as evidence of inexperience, unprofessionalism or a lack of preparation. Isn’t a straightforward “I don’t know” far more useful than an answer based on incomplete information, a lack of understanding or little more than a guess? Investors’ interests are probably best served when portfolios are constructed through an informed and forthright approach to investment opportunities.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA