Since becoming concerned by the unnatural imbalances being placed upon the financial system in 2002 and becoming outright alarmed by 2004, I have done all I can do to get my house in order, so to speak. This, as a normal citizen and business owner has included normal things like paying off debt and seeking out the safest cash vehicles (and for this I'll always thank Robert Prechter, no matter what criticism is launched his way from casino patrons), and some abnormal things like becoming a gold bug and a financial market writer.
Today, the requested change (to revoke margin 'privilege') has gone through on our brokerage account, which doubles as the NFTRH 'capital preservation' portfolio. I mean, in the wake of MF Global and years of knowledge that the modern financial system is ultimately sitting on a foundation built of Balsa Wood and Duct Tape, who needs the convenience of margin anyway? Routinely shorting the stock market is a fool's game anyway. I'll use options or those inefficient short funds if I feel a need to hedge. But this account is for 'preservation' after all, as it is balanced by actual things of value in real life, so going high cash and T bills – as it is now, along with a very few investments – is by far the preferred route.
So this morning I pulled up Fidelity and looked at the new, margin-free brokerage account and had a familiar feeling. It is the feeling of having taken yet one more small step away from the casino and its wild eyed patrons. I'll speculate along with the best of 'em, but at the same time I will never get lost in being a patron at a rigged game.
Sometimes I get caught up in market management in the newsletter and even here on the blog. But the reminder is that all of this comes after the house is put in order with regard to debt, physical property, cash, monetary stores of value and now, a limiting of the damage that the institutions I deal with can do to my personal financial health.
Again, this is not to say that Fidelity acts in a manner that some brokers do, re-hypothecating peoples' money all over the global casino, but I am a 'if it even has the slightest chance of going wrong, ELIMINATE it' kind of guy. One more thing was eliminated today and the mind is freer still to do what I enjoy doing.