Financial markets are simply assets that are being priced to reflect the intrinsic value of expected future free cash flows to investors.  Over the long term market valuations are driven by underlying FCF fundamentals but short term pricing is heavily influenced by technical cues and investor sentiment.  It is imperative then to understand one's investment horizon in order to develop and implement an investment strategy.  A strong portfolio strategy will have a flexible periphery able to accommodate short term pricing events whilst developing a longer term core based on a view of fundamental strength or weakness.  The framework must always be Risk, Growth and Cash Flows.  

​The Chicago Economist​