Don't Invest Like Massachusetts Voters

Scott Brown won the Massachusetts Senate seat long held by Ted Kennedy. His victory has been characterized as "a message to Washington." In truth, it's more akin to the "buy-high, sell-low" approach that victimizes most investors' portfolios. Hype trumps fact and emotion rules the day.

Scott Brown drives a truck, is married to a Boston newscaster, and has a daughter who appeared on American idol. He also appeared in-the-buff as a "Cosmo" centerfold. The only significant piece of legislation he ever sponsored was to allow hospital workers to deny emergency contraceptives to women based on their personal beliefs -- i.e., people could ignore Commonwealth laws if they disagreed with the law. And the message he wants to send to Washington is that it needs to return to the days of George W. Bush.

Brown's victory came just 14 months after President Obama carried Massachusetts by a wide margin. Clearly voters are disappointed, but do they really know what they're disappointed in? Yes, unemployment is high; but is that Obama's fault? Think about what he inherited. And then think about the fact that the last time unemployment was this high was during Reagan's (the patron saint of the Republican party) administration -- during the height of a recession that was nowhere near as severe as the current downturn. And yes the deficit is high -- but Treasury had a surplus when Clinton left office. The deficit soared under Bush. And if the government hadn't stepped in to rescue the economy, we would be in the midst of the Greater Depression with unemployment approaching 35%-50%.

So what does this have to do with investing? Be patient. Make decisions based on facts not hyperbole. Don't expect to get rich overnight. Focus on the fundamentals. And remember that -- on the surface -- Enron, WorldCom, and Sirius all looked like good investments. But appearances lie.