An overarching theme runs through the management of our clients’ assets and the guidance we provide to them: Focus on those things within your control.
Four principles have been intrinsic to our company since our inception. They represent an enduring investment philosophy that helps clients assemble diversified, well-balanced investment portfolios.
An appropriate investment goal should be measurable and attainable. Success should not depend on outsized investment returns or impractical saving or spending targets.
Defining goals clearly and being realistic about ways to achieve them can help safeguard investors from common mistakes.
A sound investment strategy starts with an asset allocation—a mix of assets with different characteristics, such as stocks, bonds, and cash equivalents—befitting the portfolio’s objective. The asset mix should reflect reasonable expectations for risk and returns and use diversified investments to avoid exposure to unnecessary risks.
Both asset allocation and diversification are rooted in the idea of balance. Because all investments involve risk, investors must manage the balance between risk and potential reward through the choice of portfolio holdings.
Markets are unpredictable. Costs are forever. The lower the costs of investing, the greater share of an investment’s return an investor can capture. And research suggests that lower-cost investments have tended to outperform higher-cost alternatives.1 To hold on to even more return, investments should be managed for tax efficiency. Investors can’t control the markets, but they can control the bite of costs and taxes.
Investing can provoke strong emotions. In the face of market turmoil, some investors may find themselves making impulsive decisions or, conversely, becoming paralyzed, unable to implement an investment strategy or rebalance a portfolio as needed. Discipline and perspective, which includes impartial financial advice for those who want it, can help investors remain committed to a long-term investment program through periods of market uncertainty.
1 Wallick, Daniel W., Brian R. Wimmer, and James J. Balsamo, 2015. Shopping for Alpha: You Get What You Don’t Pay For. Valley Forge, Pa.: The Vanguard Group.
All investing is subject to risk, including the possible loss of the money you invest. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account.
There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
Investments in bonds are subject to interest rate, credit, and inflation risk.
Diversification does not ensure a profit or protect against a loss.
We recommend that you consult a tax or financial advisor about your individual situation.