Mebisode: When to Sell

Welcome to the Meb Faber show, where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas, all to help you grow wealthier and wiser. Better investing starts here. Matt Faber is the cofounder and chief investment officer at Cambria Investment Management. Due to industry regulations, he will not discuss any of Cambria's funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not the opinion of Cambria Investment Management or its affiliates. For more information, visit cambriainvestments.com. What's up, everybody? It's time for another Mevisode. Today's topic is one that's gnawing at me and gnawing at me for years, and I've never been able to complete this piece out of thousands of articles I've written, numerous books, white papers, blogs, all that stuff. This is one I've rewritten probably more than anything. And I don't think it's the best piece ever, but it may be one of the most important. And the topic for so many people is about what do they do with an investment once they have it? When to sell is the name of this Mephistode, and it tackles when to let something go. Let's begin. You spent countless hours doing due diligence, digging through prospectuses, listening to podcasts, reading some white papers. You crafted a plan, implemented a sound asset allocation portfolio, reflecting your goals and beliefs. You put the money to work, and now you're invested. Many investors now think they're done. But for how much ever work went into the purchase decision, now comes the more challenging part. Many investors spend countless hours fretting, deciding on what investments to buy with their hard earned money, their life savings, and then they just wing it. The phraseology we often hear from new clients is, hey, Meb. We bought your fund. We're gonna watch it, and we'll see how it does. We'll see how it goes. What does that even mean? Translation, if the fund goes up and outperforms in the coming months, we'll keep it. But if it goes down or underperforms, you're out. And, by the way, the benchmark comparison is never established ahead of time. Rather, it becomes whatever is performing well, which for as we know, past fifteen years has been The US stock market like the S and P 500. Is this the wisest strategy? Is it most likely to help an investor reach their goals? Is it most likely to help a financial adviser serve and retain their clients? I think there's a better way, which has resulted in this piece, this episode, this Mevisode, this guidebook you're currently listening to. Think of it as an owner's manual, not just for our Cambria ETFs and funds, but for any of your investments. This guidebook will discuss how best to view your investments, measure their success, manage them within your portfolio, and recognize when it might be …