Putting cash to work rather than waiting for things to “settle down.”
Being patient during flat markets.
Selling out of a winning company or fund that you’ve held for a long time to diversify your risk.
Voluntarily recognizing capital gains and paying the associated taxes to de-risk your portfolio.
Managing your portfolio risk at the asset allocation level instead of “hedging” strategies.
Ignoring the “advice” from talking heads that know nothing about you whatsoever.
Ignoring the allure of individual stocks.
Ignoring “financial advisors” (aka insurance/annuity salespeople) promising great returns with downside protection.
Embracing the “if it sounds too good to be true, it probably is” philosophy.
Focusing on total return instead of yield.
Demanding to see the evidence rather than accepting the narrative story.
Understanding that your contributions, asset allocation,
Understanding that the prior 1, 3, 5, and 10-year returns say nothing about the next 1, 3, 5, and 10-year returns.
Accepting short-term volatility for long-term potential growth.
Changing your portfolio only when you’ve changed your goals.
Eliminating emotional ties to specific investments.
Not chasing the next hot investing fad (i.e. Bitcoin).
These types of aphorisms are practically unlimited. And they are almost all behavioral which is ironic since, as I discussed two weeks ago, it is the attribute that investors value least from their financial advisor.
Even more ironically, in practice – with perhaps the exception of technical retirement advice – I think clients value perspectives on the tenets above more than just about anything else. And I believe it’s because the compounding value of any one of these repeated over a multi-decade investing lifetime can be enormous. And with their entire financial lives hanging in the balance, it’s always time well spent!
Thanks for reading!
We have clients across the country; if you know someone we may be able to help with their retirement planning, we would be happy to have a conversation. Please feel free to reach out to me here. To see how we work with out-of-town clients, see here.
Disclaimer: Any opinions are those of Ashby Daniels and not necessarily those of Raymond James. This material is not intended to provide specific advice or recommendations for any individual. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor
about your individual situation.
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