Married to the Market
And your spouse, too
by Phil Weiss (

TOWACO, NJ (Nov. 4, 1998) -- There is one aspect of purchasing stocks that is rarely addressed in this or any space. It has to do with the whole decision-making process over whether or not to buy shares of stock. The vast majority of the articles I've read are about the decision as if it's a one-person choice. Often this is far from the truth.

Once you're married, investment decisions have an impact on more than just the person who places the buy or sell order. You have a different level of accountability for your decisions when you're no longer single.

By nature, my wife is more conservative when it comes to investments than I am. I think in most cases being conservative is something that comes with the territory when you're an accountant. Yep, sometimes it's pretty scary to think that I'm married to another accountant. Fortunately, our work is quite dissimilar so we rarely talk shop around the house. If you asked my wife, she'd probably tell you that my more aggressive investment style (my pre-Cash-King days included some investments that I would no longer make) is one of my many anti-accountantish traits.

It was only right before our second date that my wife purchased her first stock. As our relationship became more serious, one of the important things we discussed was how we would make investing decisions.

Now it may be that not every couple talks about this stuff before getting married, but I can assure you that addressing these issues beforehand can save a lot of heartaches in the long run.

We knew that things should be handled as a partnership, but with only two votes it can be awfully tough to break a tie. What we finally decided was that she could have veto power over any investment I wanted to make. Yeah, I know that sounds like I'm wimping out, but it really made sense in the long run. If you read a little bit more, you'll see exactly what I mean.

Knowing that my wife had veto power was the first step towards more careful evaluation of potential stock purchases. If I couldn't justify the purchase decision to myself, then it would be impossible to justify it to her.

The first several times I bought stocks after we got married, I told my wife what I wanted to do before I went and did it. A couple of times she raised valid concerns that led me to reconsider my decision. Now that she sees that I've developed a consistent, well thought out investment strategy, I am no longer compelled to let her know what I'm doing before I do it. This doesn't mean that I stopped telling her what I want to do. It just means that I don't always have to ask her approval first.

I still tell her about our transactions, but many times it's after I've actually executed the trade. This, of course, is helped by the fact that I have reached a point where I very rarely contemplate buying shares of a company in which we don't already own shares. Generally, I just add to our existing positions. In order for me to buy something else, I'd have to liquidate one of our current holdings. Also, each time I purchase a stock I follow the Foolish guidelines for stock commissions (i.e., I keep commissions costs to no more than 2% of my total purchase price).

Of course, with the market's recent up, down, and all-around behavior, I can't say that I don't still get the occasional question. As a matter of fact, here's the response I got when I sent her an e-mail telling her that I purchased additional shares of two of our Cash-Kings during the second week of October:

"Boy, you have been a busy little bee while I was out dining a client. My conservative hat saying let's put our money in the mattress is starting to rear its head. I am getting very concerned."

Here's how I responded to her concerns:

"I only bought x shares of Pfizer and y shares of Cisco using your IRA money. Pfizer is about 25% off its high and Cisco is about 30% off its high.

"I look at what's happening right now as providing us with an opportunity to purchase the stocks of great companies at bargain prices. This is certainly not money that we'll need any time soon (matter of fact, we can't even access it for at least another 20 years without penalty).

"Buying at yesterday's low price would have been even better than the price I paid today, but I'm not trying to time the market.

"Warren Buffett had a great quote about this in a recent annual report. He said something like if you're still in the phase of your life where you're buying shares of great companies, you should be happy when the market falls. Sometimes that's a tough one psychologically, but it really does make sense to me when I dig down deep to think about it.

"I know we've taken a hit with the market's fall just like nearly everyone else, but my view is that we're going about creating wealth the right way for the long haul.

"I do understand your concern, and it's one of the reasons that it's best to only commit long-term money to the market. Anything that we need within the next five years should not be in the market. I don't think that it is. In my view (which we can go over) we are fine in this regard. As long as we're not forced to sell anything to raise cash and we invest in good companies, we'll be fine. This doesn't mean that every investment will be successful, but I think that over the long haul our winners will more than make up for any losers that we may have.

"Bottom line of all this (some of which could even be called gibberish, I'm sure) is not to worry so much about things that are beyond our control on a short-term basis. The only risk that we run by investing now is that if the market falls even more, and we could have bought at lower prices, we'll end up spending a little more time getting back to even. Over our time frame, though, that should be relatively meaningless.

"For what it's worth, the stocks we bought today are already making us money [by the way, they still are] -- so much for the long-term focus with that statement, huh. :-)"

I really believe that what I told her is true. It's all part of why I believe in investing for the long haul and not the short-term.

I'll be back tomorrow to relay some recent conversations that I had with the Vice President of Finance and Treasury at Tellabs (Nasdaq: TLAB).

Have a Foolish evening,


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11/04/98 Close

Stock  Change    Bid 
 AXP   +3 9/16  94.00 
 CHV   -1 1/8   79.63 
 CSCO  +2 3/16  65.56 
 KO    -  13/16 72.13 
 GPS   +5       64.19 
 EK    +  9/16  76.50 
 XON   -1       72.00 
 GM    +2 1/4   67.00 
 INTC  +4 3/8   94.81 
 MSFT  +  5/16  105.50 
 PFE   -3 1/4   106.00 
 SGP   -1 1/16  104.44 
 TROW  +1 5/16  35.75 
                  Day     Month   Year    History 
         C-K      +1.62%   2.56%  14.00%  14.00% 
         S&P:     +0.71%   1.82%  11.20%  11.20% 
         NASDAQ:  +1.96%   2.95%   9.44%   9.44% 
 Cash-King Stocks 
     Rec'd    #  Security     In At       Now    Change 
     2/3/98   24 Microsoft     78.27    105.50    34.79% 
     2/3/98   22 Pfizer        82.30    106.00    28.80% 
     5/1/98   37 Gap Inc.      51.09     64.19    25.64% 
    6/23/98   34 Cisco Syst    58.41     65.56    12.24% 
    2/13/98   22 Intel         84.67     94.81    11.97% 
    8/21/98   22 Schering-P    95.99    104.44     8.80% 
     2/6/98   56 T. Rowe Pr    33.67     35.75     6.17% 
    2/27/98   27 Coca-Cola     69.11     72.13     4.37% 
    5/26/98   18 AmExpress    104.07     94.00    -9.67% 
 Foolish Four Stocks 
     Rec'd    #  Security     In At     Value    Change 
    3/12/98   20 Eastman Ko    63.15     76.50    21.14% 
    3/12/98   20 Exxon         64.34     72.00    11.91% 
    3/12/98   15 Chevron       83.34     79.63    -4.46% 
    3/12/98   17 General Mo    72.41     67.00    -7.47% 
 Cash-King Stocks 
     Rec'd    #  Security     In At     Value    Change 
     2/3/98   24 Microsoft   1878.45   2532.00   $653.55 
     2/3/98   22 Pfizer      1810.58   2332.00   $521.42 
     5/1/98   37 Gap Inc.    1890.33   2374.94   $484.61 
    6/23/98   34 Cisco Syst  1985.95   2229.13   $243.18 
    2/13/98   22 Intel       1862.83   2085.88   $223.05 
    8/21/98   22 Schering-P   2111.7   2297.63   $185.93 
     2/6/98   56 T. Rowe Pr  1885.70   2002.00   $116.30 
    2/27/98   27 Coca-Cola   1865.89   1947.38    $81.48 
    5/26/98   18 AmExpress   1873.20   1692.00  -$181.20 
 Foolish Four Stocks 
     Rec'd    #  Security     In At     Value    Change 
    3/12/98   20 Eastman Ko  1262.95   1530.00   $267.05 
    3/12/98   20 Exxon       1286.70   1440.00   $153.30 
    3/12/98   15 Chevron     1250.14   1194.38   -$55.77 
    3/12/98   17 General Mo  1230.89   1139.00   -$91.89 
                               CASH    $120.62 
                              TOTAL  $24916.93 
 *Please note: On 8/4/98 $2,000 cash was added to the
portfolio. $2,000 will be added every six months.

*The year for the S&P and Nasdaq is as of 02/03/98