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Holly LaFon
Holly LaFon
Articles (8602)  | Author's Website |

John Rogers' Monthly Commentary - January

At the request of our clients, we have accepted the monthly commentary as an industry norm, however we question the convention

February 07, 2018 | About:

New Year’s resolutions—love them or hate them—have become quite the popular tradition. For many people, January 1st is synonymous with “Day One” on the road to achieving a “new goal.” Yet, as we all know, the road is a difficult one to follow, because it’s incredibly tough to resist temptation. By the time the year ends, a whopping 91% of resolutions will have fallen by the wayside, as people have the shortsighted tendency to value the pleasures of the present over the satisfaction of fulfilling their goals in the future.

If publishing a monthly commentary suggests a similar shortsighted preoccupation with short-term price fluctuations and events, then why do we, the patient investor, keep doing it? At the request of our clients, we have accepted the monthly commentary as an industry norm, however we question the convention. Our value portfolios are built with a long-term view. The obsession with day-to-day headlines and quarter-to-quarter earnings results accentuates an increasing fixation on maximizing near-term profit at the expense of the very thing we seek to create—long-term shareholder value. Furthermore, editorializing deviations over a 30-day period gives the appearance that an occurrence is material in our decision making process, when in reality the price action is merely short-term noise within the context of our three- to five- year investment horizon. As bottom-up value investors, our deep knowledge of a company’s fundamentals and the industry in which it operates enables us to maintain our conviction on a position amidst the turbulence, and helps us be opportunistic should a major price dislocation arise.

Thus, as we embark on our 35th anniversary year, our monthly commentaries will take a page from our contrarian roots. Our resolution is to continue delivering on our promise by steering clear of short-termism, and to deliver pieces that focus on topics of interest, relevant performance and items that illustrate our investment perspective. Just like the 9% who exercise discipline and control while persevering toward their goal, and who keep their resolution in the face of temptation, we are committed to generating sustainable returns through the three tenets of our value investment philosophy: patience, focus and independent thinking.

The opinions expressed are current as of the date of this commentary but are subject to change. A value investment strategy seeks undervalued stocks that show a strong potential for growth. The intrinsic value of the stocks in which a value strategy invests may be based on incorrect assumptions or estimations, may be affected by declining fundamentals or external forces, and may never be recognized by the broader market.

Investors should consider carefully the investment objectives, risks, and charges and expenses before investing. For a current summary prospectus or full prospectus which contains this and other information about the funds offered by Ariel Investment Trust, call us at 800-292-7435 or click here. Please read the summary prospectus or full prospectus carefully before investing. Distributed by Ariel Distributors, LLC, a wholly-owned subsidiary of Ariel Investments, LLC. Ariel Distributors, LLC is a member of the Securities Investor Protection Corporation.

About the author:

Holly LaFon
I'm a financial journalist with a master of science in journalism from Medill at Northwestern University.

Visit Holly LaFon's Website


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