A famous investor once said, “Investing is simple, but it’s not easy.”
It’s not easy for many reasons. including uncertainty, risk, complexity, emotional biases and tin,e commitrnenl. Despite these challenges, the right investment pion con help build wealth over the long term. The stokes ore too high to bet one’s financial future on guesswork. We believe long term investment success requires a framework based on sound investment principles that hove withstood the test of time.
We believe these timeless investment principles ore the foundation of o sensible investment strategy. They ore what allow us to ignore the day-to-day noise arid emotional biases that can jeopardize rational thinking and sound investment decision-making.
We believe investors should maintain a comprehensive long-term financial plan that considers multiple aspects of your financial life, assesses risk tolerance and seeks to invest in a diversified mix of quality investments that con be held through the market cycles
A sound investment strategy requires the effective management of risks. This can be achieved by maintaining on appropriate asset allocation, diversifying across different asset types and protecting against varioustypes of risk, such as inflation risk, company-specific risk, longevity risk, reinvestment risk, liquidity risk, market risk, credit risk and concentration risk.
Choose investments that ore appropriate for your investment objectives and risk tolerance and consider a diversified mix of stocks, bonds and cash equivalents to balance inflation protection. income generation and liquidity needs. For some investors, nontraditional investments such as private investmentsand alternatives may also hove a role.
The foundation of your portfolio should be allocated to quality investments that have withstood the test of time. Be cautious when considering investments that are new, untested or whose primary attraction is their current popularity. Remember that risk and return are two sides of the same coin.
Adjustments to a strategic asset allocation should be made primarily
due to changes in your risk tolerance and return objective or income and liquidity needs. Time jn the markEtl,._proper diversification and periodic rebalancing have proven to be prudent strategies. Thus, investors should focus on a long-term strategy that accounts for life changes while avoiding attempts to time the market. Buy and hold does not mean buy and ignore. Professional, active manogers can be utilized to effect changes within a long-term strategy and seek to position portfolios optimally over time.
The tax impact of investment decisions should be taken into consideration. but it should not be the prirnary driver of those decisions. The focus should ren,ain on making good investment decisions tt,at align with your overall goats ond risk tolerance. Tax-lossharvesting can be a useful tool to help manage taxes. but ii should be done in a thoughtful and strategic manner.
