• Skip to primary navigation
  • Skip to main content
  • Skip to footer
Mullooly Asset Management

Mullooly Asset Management

Fiduciary Fee-Only Financial Planner | Investment Advisor in Wall, NJ

  • Our Fees
  • About us
  • Schedule a Meeting

Is Settlement Date the time to Judge Trades?

March 4, 2018 by Thomas Mullooly

Is “settlement date” the right time to determine whether you’ve made the right move in your portfolio?  After all, one of Wall Street’s oldest sayings is the “best trades are profitable right from the start.”

But is two days after the trade (settlement date) the right time to determine that?  Maybe we should wait a while beyond settlement date to decide whether a move works out.  We write about investor behavior topics often.  For today, let’s get away from the corner of Broad and Wall Streets to take a look at this concept:

It’s been a month since the Super Bowl, where the Patriots lost to the Eagles.  But in the end, the biggest winner might ultimately be the San Francisco 49ers, and Jimmy Garrapolo.

Settlement DateGarrapolo, the back up QB in New England (behind Tom Brady), had an expiring contract with the Patriots.  They had to either start playing Garrapolo (not likely with Brady around), or deal him (to get some value) before his contract expired.  Near the trade deadline, Jimmy G was shipped off to the struggling San Francisco 49ers.

Now, Garrapolo went on to start (and win) the last five games for the 49ers.  A few days after the Super Bowl, Garrapolo is handed the largest contract in NFL history (five years), $137.5 million.

After a coin-flip this week (49ers – Raiders), it’s been determined New England gets the 43rd overall pick in the draft in April.  With the coin flip, we’re essentially at “settlement date.”  Standing at this time and place, we simply don’t know how this trade will work out.

Will Garrapolo be the big winner in this turn of events?
On paper, it seems to be so — today.

However, like so many of the transactions we’ll make over time with our investments, how will future events unfold?  Who will the Patriots draft with the 43rd overall pick?  The player selected may turn out to be a game-changer for the Patriots – possibly for years to come.  Perhaps Garrapolo sustains an injury and doesn’t play much.  It’s also possible the 49ers mis-manage their roster and continue to struggle, leaving Garrapolo as the answer to a trivia question – with an albatross of a contract for a struggling organization.     

Consider the deal the Giants made to get Eli Manning on draft day 2004.  Manning was traded to the NY Giants for Phillip Rivers.  After 14 seasons, both players have had solid QB stats through their careers.  The main “separator” has been Manning’s two Super Bowl rings.

But the Giants gave up more to get Eli.  Three draft picks went to San Diego.  One pick became kicker (Nate Kaeding) a reliable kicker and a Pro Bowl player.  Another pick was traded to acquire Roman Oben, who played a solid tackle for the Chargers.  The third pick was used to select Shawne Merriman.  Merriman was an outstanding defensive Pro Bowler, scoring double-digit sacks in each of his first three years.  Who “won” that trade?

Often times, as an investor, it “feels good” to make a change in your account.  To clear away something not performing as well as the overall market, or not currently keeping up with the other “young colts” in the portfolio.  While that “good feeling” may last through settlement date, or for a week, or even a year… what has become the end result?  Here’s some ways to decide:

Did you add more risk to your overall picture?
Did you add more to a sector – right at the top of its’ cycle?
Did you “sell low” and “buy high” – just to feel better?
Did you “un-balance” your account by making this change?

 

Never miss a post...and we deliver!

newsletter mailman

Get our updates delivered right to your inbox. Sign up today!

Success! Now go and check your email to confirm your subscription.

There was an error submitting your subscription. Please try again.

We won't send you spam. Unsubscribe at any time. Powered by ConvertKit

Filed Under: Investor Behavior

About Thomas Mullooly

Thomas Mullooly is owner and founder of Mullooly Asset Management, Inc. In 2002 Tom opened Mullooly Asset Management, a fee-only investment advisory firm. As an investment advisor, and not a broker, Tom works strictly for his clients. With the help of point and figure charting, Tom builds a realistic game plan for clients.

Footer

2052 NJ-35, Suite #203
Wall Township, NJ 07719
Phone: (732) 223-9000
Fax: (732) 223-9600
Email: support@mullooly.net

  • Privacy Policy
  • Disclosures and Legal Disclaimers

Useful Links

  • Contact Us
  • Client Login
  • Pay Bill Online
  • About us
  • Our Fees
Text Example

The information on this website and blog do not involve the rendering of personalized investment advice. A professional advisor should be consulted before implementing any of the options presented. None of the content contained in this website should be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.

Follow Us

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Resource Center

  • Videos
  • Podcasts
  • Blog

Copyright © 2021 · Design by :- Eliza Jack