Broker Check

Investment Management

In 2008, the financial world was in a dark place. The markets were in the midst of the subprime crisis. The sell-off in equities was broad and brutal. At the depths of the decline, equity markets fell by over half. The news media blared that the worst was yet to come. Desperate to keep what they had left, many sold into the decline.

Today it is a different world. Stocks continue to make new highs and investor sentiment is positive. It is good to see the economy growing and investors amply rewarded. While the past crisis was serious, most who followed solid investment principles survived and flourished since that time. As Warren Buffett once said, “Sound principles can get one though almost anything.”

 Twelve Investment Principles We Live By

  1. THERE IS NO SUCH THING AS “SHORT-TERM INVESTING.”

  2. INFORMATION IS NOT KNOWLEDGE.

  3. OPTIMISM IS KEY.

  4. ASSET ALLOCATION IS A DIVERSIFICATION STRATEGY THAT HELPS MANAGE RISK.

  5. RETURN VS. RISK.

  6. MOST DOLLARS FLOW INTO HIGH-PERFORMING INVESTMENTS AFTER THE PERFORMANCE HAS OCCURRED.
  1. MARKET INDEXES AND BENCHMARKS CAN TELL A MUCH-DISTORTED STORY.

  2. A WELL-BALANCED PORTFOLIO SHOULD BE DIVERSIFIED AMONG THE MAJOR ASSET CLASSES.

  3. YEARS OF HIGH RETURNS CAN BE COMPLETELY REVERSED BY ONE BAD YEAR.

  4. THE TRADITIONAL RULES OF INVESTING ARE STILL TRUE.

  5. VALUATION STILL MATTERS.

  6. MARKET TIMING DOESN’T WORK.

Diversification may help reduce, but cannot eliminate, risk of investment losses. 

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