Author: Ilana Polyak
At least once a year, Dominick Paoloni flies to the British Virgin Islands, rents a 50-foot catamaran for a week and sails the turquoise Caribbean Sea. The trips, which tend to coincide with favorable winds, take him to one or two islands a day. The rest of the time is spent watching the sailboat slice through still, glassine waters.
On a few occasions, the seas have not been so kind, catching him in a tropical storm. Paoloni knows what to do on these occasions. “If I’m fighting with a 50-foot mast and there’s lightening coming at me, I sail out of the way and head to shore,” he says.
That’s much the same storm the Lakewood, Colo., money manager saw brewing in last years market. Extreme volatility is thrashing stocks around and an investor in a tiny catamaran is unlikely to win such a battle against nature. “In September I realized I was in the middle of financial hurricane,” he says about recent financial events. “When all my correlations converged I got out of the way.”
Mr. Paoloni moved his client accounts into a fully defensive position in money-market funds, short-term & intermediate treasuries. “I need to see volatility come down before I commit assets to this market again,” he says.
rate
email
print
link to this page
Comments: 2
And too many investors act like lemmings and follow the advice of the "Experts" to jump off the cliff. I choose to be different.