Investing Principles

MAKE SURE YOU ARE TRULY DIVERSIFIED

MAKE SURE YOU ARE TRULY DIVERSIFIED

• Not truly diversified until you own something that makes you uncomfortable
• Uncomfortable usually means: unpopular, underperforming and cheap
• “Uncomfortable” assets today include:
  • Value stocks
  • Emerging markets stocks and bonds

EXTEND YOUR INVESTMENT TIME HORIZON

EXTEND YOUR INVESTMENT TIME HORIZON

PROBABILITY OF A LOSS FOR THE S&P 500
(Rolling Price Returns, Jan 1930 – Jan 2021)

• 1 day investment = 46% chance of loss
• 1 year investment = 31% chance of loss
• 5 year investment = 19% chance of loss
• 10 year investment = 10% chance of loss

Source: Richard Bernstein Advisors “Insights” March 2021

Watch the related WEALTHTRACK episode.

STICK WITH YOUR INVESTMENT DISCIPLINE

STICK WITH YOUR INVESTMENT DISCIPLINE

• KNOW YOUR RISK TOLERANCE
• STAY WITH YOUR ASSET ALLOCATION
• REBALANCE WHEN IT GETS OUT OF WHACK
• BE DIVERSIFIED AMONG:
  RISK ASSETS, LIKE STOCKS
  SAFE ASSETS, LIKE SHORT-TERM TREASURIES
  HEDGES AGAINST DISASTER, LIKE GOLD

Watch the related WEALTHTRACK episode.